Global demand for oil is expected to peak in the next 20 years, as an overall rapid growth in global energy demand is met by a diverse mix of fuels through 2040, BP Plc said in its most recent update of its "Energy Outlook."
"We are seeing growing competition between different energy sources, driven by abundant energy supplies, and continued improvements in energy efficiency. As the world learns to do more with less, demand for energy will be met by the most diverse fuels mix we have ever seen," BP chief economist Spencer Dale said in the Feb. 20 report.
Unlike some other industry outlooks that see oil consumption cresting closer to 2040, under BP's base case scenario, world oil demand should rise to about 110 million barrels per day around 2035, up from a current level of about 95 MMbbl/d before tapering off. All of BP's proposed scenarios show global oil consumption topping out before 2040.
The global fuel supply mix will continue to transition toward a lower carbon composition, as the use of electric vehicles, renewables and natural gas rises, according to the report from the London-based oil major.
Increasing about 1.6% annually, natural gas demand is expected to grow much faster than oil or coal, "with its share in primary energy overtaking coal and converging on oil by the end of the Outlook," the report said.
An increased demand for power and the continuing expansion of LNG will play key factors in the increased use of natural gas in the coming years, BP said.
"The increase in gas used by the power sector (59 Bcf/d) is driven by the overall growth in global power demand. The competing trends in renewables and coal demand means the share of gas within the power sector is relatively flat over the Outlook," the report said.