BP sees a future of slowing oil demand growth, abundant supplies

Oil demand growth will slow and supplies will remain abundant in the coming decades, meaning producers in the Middle East, Russia and US continue to gain market share at the expense of higher-cost rivals, said BP Plc. Demand for oil will expand by an average 0.7 per cent a year over the next two decades, little more than half the rate in the preceding 20 years, BP said on Wednesday in its Energy Outlook 2035 report. By the early 2030s, transport will cease to be the main driver of growth, a significant departure from the historical trend. “We are seeing a shift in the global energy mix,” Bob Dudley, BP’s chief executive officer, said at a briefing in London. “There is a continuous de-carbonisation of the fuel mix. Oil demand continues to grow over the next 20 years, but energy efficiency will moderate growth in demand.” BP’s analysis suggests the dominant oil market trends of the past few years - plentiful supply, competition for market share between the biggest producers and moderate demand growth - will prove to be long-term phenomena. The expansion of electric cars, increasing energy efficiency and more renewables could potentially cause oil demand to peak in the mid 2040s, BP’s Chief Economist Spencer Dale said. (Rakteem Katakey/Bloomberg)