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Oil Demand Stays Strong Despite EV Surge
In the new hit TV show “Landman”, the lead character, Tommy Norris, delivers a five-minute speech that summarizes just how critical for modern civilization crude oil is. Everything, up to and including wind turbines, depends on oil. This year, with record EV sales in China and the continued build out of wind and solar in Europe, has proven just how pertinent that speech is to the current state of the energy transition-or the absence of it.
About a month ago, the World Bank predicted in a blog post that crude oil demand would hit 103 million barrels daily in 2024. What the World Bank noted was that this number represented slowing demand. What the World Bank did not mention was that the number also represented another all-time high for oil demand.
In its latest monthly oil market report, the International Energy Agency, another doomsayer for oil demand, said demand was about to actually pick up in 2025, rising from this year’s estimated 840,000 barrels daily to 1.1 million barrels daily. The IEA attributed the pick-up to the increase in demand for petrochemical products that would offset lost demand from the transport sector.
Yet even demand from the transport sector is not shrinking anywhere near the rate that was predicted. China has cemented its place as the world’s number-one market for electric vehicles. These constitute increasingly large portions of total car sales. July 2024 was the first month ever in which so-called new energy vehicle sales exceeded ICE car sales. Since July, China has consistently marked months of EV sales, holding more than 50% of new car sales
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