Consumer preferences for electric cars, solar energy, and other green initiatives were predicted to lower the oil demand, but the peak for oil was least expected, according to the British Petroleum press release. Global oil demand fell by about 29 million barrels a day this year to signify an imminent peak due to COVID-19 pandemic. Here are the scenarios and developments predicting that the peak might just be beginning: 

British Petroleum Energy Outlook 2020

British Petroleum Energy Outlook 2020*

  • BP Oil Scenarios Explained
    • Scenario 1: The Rapid Transition – projects a series of policy measures, supported by more-targeted sector-specific measures that cause carbon emissions to fall by about 70% by 2050
    • Scenario 2: Net Zero Scenario – кeinforces that policy measures embodied in Rapid are added and supported by significant shifts in societal behavior and preferences to reduce carbon emissions.
    • Scenario 3: Business-as-Usual Scenario-Assume little impact from policy shifts or new technology in curbing carbon emissions
    • BP primary energy demand increases by about 10% in Rapid and Net Zero over the outlook and about 25% in BAU.
  • Oil Accounting is Experiencing Shakeups.
    • A list of energy analysts have joined BP in foreseeing a peak while OPEC+ is retreating in its peak forecast of 2040, saying it is too optimistic.
    • Notable exceptions to peak oil demand are also less optimistic and include the International Energy Agency (IEA), which sees demand “plateauing.”
  • Oil Could get a hit from the Electric Vehicle (EV) Revolution.
    • For the first nine months of 2020, car sales plummeted for every automaker except Tesla, which sold more EVs’ than before
    • The most important EV models were launched this year, in the middle of the pandemic, including Tesla’s Model Y sport utility vehicle in February and VW’s ID.3 hatchback in September.
  • No Comeback for Fossil-Fuel Cars
    • During 2020 lockdowns, environments became greener, and bike sales peaked, giving countries something to think about
    • Despite faltering economies, countries did not find a reason to eliminate environmental regulations-instead, they doubled down, which could hit the fortunes of internal combustion engines (ICE)
  • Battery Cars are expected to Create a Price-Parity Milestone 
    • Historically, EVs were more expensive to make than gasoline cars.
    • Analysts now believe with a battery pack at the cost of $100 per kilowatt-hour, the cost of building EVs will be similar to gasoline-fueled vehicles and, later, get cheaper. 
    • As battery prices improve, customers will take up more EVs, and a mass-market will make the prices even lower.
  • Renewed EV Push in Europe and Elsewhere
    • This year, tough new EU fuel-efficiency regulations were enacted.
    • In oil-rich Norway, more than 70% of new cars sold in 2020 came with a plug.
    • Europe is leading in EV, as uptake soared 11% in Q3, nearly doubling China’s adoption rate.
    • In China, EV subsidies set to expire in April were extended through 2022
    • In the U.S, President-elect Joe Biden is expected to make climate action a top priority as he named former Secretary of State John Kerry as special envoy for climate.
    • California State set 2035 as the year to phase-out the sale of gasoline cars.  
    • The U.K government moved its phase-out goal for gasoline cars from 2040 to 2035, and after 2030, all new cars sold must at least have a hybrid drivetrain capable of running on a battery.
  • 2020 Transitions Show Oil Time Might be Over
    • In February, BP’s chief executive, Bernard Looney, described the industry’s plans to cut net emissions to zero in 30 years.
    • Exxon, a major oil and gas company, was removed from Dow Jones Industrial Average this year.
    • EV companies such as Tesla had their stock having record gains this year.
    • In the first half of 2020, when the pandemic hit oil demand, the industry wrote down about $170 billion to signify they no longer believed in the value of their deposits.
    • Solar has been termed as “the new king of electricity” by IEA based on track records of development each year.
    • Small electric planes and hybrid aircraft for longer distance are moving out of the prototype stage and could be a matter of time until tanker ships fuel on hydrogen.

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