The use of oil in the road transportation sector will increase even as the sale of electric vehicles is expected to rise, according to the annual long-term outlook from OPEC.
Global oil demand is expected to grow from 95.4 million barrels per day (bpd) in 2016 to 111 million bpd in 2040, according to the World Oil Outlook (WOO) report for 2017 released on Tuesday.
The road transportation sector is currently the largest contributor to global oil demand and this trend will continue, with OPEC expecting one out of every three new barrels between 2016 and 2040 to be absorbed by the road transportation sector, the report said.
Last year, the road transportation sector represented 45 percent of the total oil demand at around 42.8 million bpd. OPEC expects the sector to add another 5.4 million bpd of demand up to 2040, when it reaches 48.3 million bpd.
OPEC seems to be optimistic about the future of the internal combustion engine (ICE) even as many countries have announced plans to ban the sales of these cars by 2040 to promote more sales of electrical vehicles (EVs).
OPEC noted that competition for ICE cars will come from alternative fuel cars in general and not only from EVs. The list of alternative fuel cars include natural gas vehicles (NGVs), and fuel cell vehicles (FCVs). The total number of conventional passenger cars is forecast to further increase from around 1,040 million units in 2016 to more than 1,600 million units.
Alternative fuel vehicles including electric, natural gas and fuel cell vehicles will increasingly penetrate the global fleet.
Overall, the fleet share of all alternative fuel vehicles is estimated to rise from around 2 percent in 2016 to nearly 16 percent in 2040 with EVs rising from 0.1 percent in 2016 to around 11.6 percent in 2040, OPEC said. “In fact, electric vehicles contribute to the majority of the increase of all alternative fuel passenger cars,” it added.