Sep 14, 2020
BP warns of oil demand peak by early 2020s
UK energy major BP has warned of a peak in oil demand within the next few years, signalling that the coronavirus pandemic is ushering in an earlier than anticipated decline for the fossil fuel era. The company, in its annual energy outlook published on Monday, modelled three scenarios for the world's transition to cleaner fuels that all see oil demand falling over the next 30 years. In the "Business as usual" case, which assumes government policies, technologies and societal preferences evolve in a manner and speed as in the recent past, oil demand rebounds from the Covid-19 hit then plateaus in the early 2020s. In two other scenarios that model more aggressive policies to tackle climate change, oil demand never fully recovers, implying 2019 levels of 100m barrels a day will be the peak for consumption. While oil demand is not expected to collapse, a plateau or decline in consumption would fundamentally alter the outlook for investment in the industry and the willingness of shareholders to keep funding new projects.
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