Global EV Switch Can Cut 13.7 Million BPD of Oil Demand by 2040: Citigroup Research

The growth of the electric vehicle industry alone could move 13.7 million barrels per day of (bpd) oil demand by 2040, the global head of Citigroup Research said.

"This is more than the 2018 oil consumption of the Middle East, Africa and Latin America combined," said Edward Morse, making a presentation at the Asia Pacific Petroleum Conference (APPEC) in Singapore.

"While demand for transportation fuels faces the threats from the adoption of electric engines and stricter environmental legislations, the petrochemical sector is set to take the driver seat of oil demand growth in future."

The demand for plastic components has outpaced all other bulk materials in 20 years, Morse said.

"The International Energy Agency (IEA) sees petchem (petrochemical) feedstock demand rising by 5 million bpd to 2040, accounting for more than a third of oil demand growth to 2030 and nearly half to 2050," Morse added.

Citigroup, in its base-case scenario, anticipates oil demand growth of 940,000 bpd in 2019 and 1.07 million bpd in 2020, based on global trade growth of 2.5%.

"But if trade growth is 0%, oil demand growth could fall to 730,000 bpd next year," Morse said.