The International Energy Agency Says "Demand For Gasoline Has Peaked"

Gasoline demand is down 10% from a year ago and is unlikely to ever surpass the record usage in 2019.

Peak Gasoline Usage

The IEA Oil Forecast shows gasoline demand has peaked but overall oil demand is another matter.

The speed and depth of the recovery is likely to be uneven both geographically and in terms of sectors and products. Gasoline demand is unlikely to return to 2019 levels, as efficiency gains and the shift to electric vehicles eclipse robust mobility growth in the developing world. Aviation fuels, the hardest hit by the crisis, are expected to slowly return to 2019 levels by 2024, but the spread of online meetings could permanently alter business travel trends.

In the current policy environment, US production growth is set to resume as investment and activity levels pick up in tandem with rising prices. Yet any increase is unlikely to match the lofty levels of the recent past. 

Global oil demand, still reeling from the effects of the pandemic, is unlikely to catch up with its pre-Covid trajectory. In 2020, the start of our forecast period, oil demand was nearly 9 mb/d below the level seen in 2019, and it is not expected to return to that level before 2023. 

Further fuel efficiency improvements, increased teleworking and reduced business travel, much stronger electric vehicle penetration and new policies to curb oil use in the power sector and more recycling could reduce oil use by as much as 5.6 mb/d by 2026, which would mean that oil demand never gets back to pre-crisis levels.

In the absence of more rapid policy intervention and behavioural changes, longer-term drivers of growth will continue to push up oil demand. As a result, by 2026, global oil consumption is projected to reach 104.1 mb/d. This would represent an increase of 4.4 mb/d from 2019 levels. Oil demand in 2025 is set to be 2.5 mb/d lower than was forecast a year ago in our Oil 2020 report.

Demand growth relative to 2019 is expected to come from emerging and developing economies, underpinned by rising populations and incomes. 

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