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

Behavior Changes 

  1. The new working-from-home models to cuts in business and leisure air travel.
  2. More governments are focusing on the potential for a sustainable recovery as a way to accelerate momentum towards a low-carbon future. 
  3. A shift towards electric cars will accelerate
  4. Better efficiency in gas-powered cars

Electric Cars 

The IEA expects global electric car sales to reach over 12 million in 2026, with a total fleet size close to 60 million. More than half of all electric cars will be situated in China, which took an early lead in their development, a quarter in Europe, the rest in Japan, the United States and other countries. By 2026, electric cars and buses will displace more than 1 mb/d of oil demand – 700 kb/d of gasoline demand and 300 kb/d of diesel – compared to 2020 levels. 

Future Gas Demand 

Gasoline's Future

The OECD’s 37 members are: Austria, Australia, Belgium, Canada, Chile, Colombia, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Israel, Italy, Japan, Korea, Latvia, Lithuania, Luxembourg, Mexico, the Netherlands, New Zealand, Norway, Poland, Portugal, Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Turkey, the United Kingdom and the United States.

Oil Refinery Demand

The combined demand for refinery-supplied gasoline, kerosene and diesel is forecast to decline by 170 Kb/d from 2019 to 2026, a sharp contrast to the previous seven years, when it increased by 6.2 mb/d. These products usually price at a premium to crude oil and are essentially the backbone of refinery economics. 

The pandemic has effectively offered refiners a sneak peek into the future of sharply lower transport fuel demand. They should use this opportunity to adjust their strategies accordingly. This bears bad news for petrochemical producers, too. Barring higher than expected NGL output, they will have to share some of their margins with refiners to secure feedstock production in refineries.

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