Has Demand for Crude Oil Already Peaked?

Has demand for crude oil already peaked? The world will burn 500,000 barrels per day of crude less in 2023 than in 2018, Energy Intelligence reckons. That is not to be confused with the broader debate over peak oil, which includes other liquid fuels like natural gas liquids (NGLs) and biofuels. Most believe the peak for overall liquids is still years — or even decades — away. But growing volumes of NGLs and biofuels are increasingly pushing their way into “oil” markets to meet consumer demand, threatening crude’s position. Opec-plus has adjusted crude output lower in the past year, and the group’s spare capacity is now robust at around 5 million b/d. That means if liquids demand peaks around 2029 — as Energy Intelligence and the International Energy Agency (IEA) roughly forecast — it could raise some urgent, critical questions for crude producers. In 2024, Energy Intelligence expects global liquids demand to reach 102.4 million b/d, which would be 2.8 million b/d higher than in 2018. But crude supply next year is expected to come in at 80.9 million b/d, still 200,000 b/d below the 81.1 million b/d of 2018, which to date has been the highest volume the world has seen. In contrast, NGLs output in 2024 would be up by 2.2 million b/d since 2018, while biofuels production would be up by 600,000 b/d. Growing NGLs output mostly finds its way to petrochemical manufacturers, bypassing traditional refineries. Biofuels are mostly added to fuels like gasoline and diesel, reducing demand for crude oil distilled in refineries. Peak liquids demand could be around 105.5 million b/d, Energy Intelligence reckons, which could be met by 83 million b/d of crude oil — just 1.9 million b/d over the 2018 peak — based on this trajectory. That suggests crude demand growth could be less than 2 million b/d from current levels before the peak.

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