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Oil demand may climb new peaks in post-coronavirus world
7/23/2020 12:00:00 AM

While the coronavirus pandemic may have done permanent damage to oil consumption in the transport sector, strong growth in petrochemicals suggests peak oil demand could still be a couple of decades away.

Changing demand patterns also raise big questions as to how refineries and producers adapt in the post-pandemic world before demand falls from its eventual summit.
An accelerated shift to cleaner energy and electric vehicles, along with vehicle efficiency improvements, had already started to gnaw away at oil demand well before the coronavirus hit.
But what is striking is that those transportation sectors seen as more resistant to energy transition due to the challenges of them running on alternative fuels – airlines and shipping – have been hardest hit and will be the slowest to recover.
Some analysts see global oil demand now peaking later this decade, while others believe it may never return to the giddy heights of 100 million b/d.
Further out, the most likely case according to S&P Global Platts Analytics’ Scenario Planning Service is 3 million b/d removed from oil demand to 2040, with aviation the most impacted sector. But that also needs to be put into context.
Jet and marine fuels make up a relatively small piece of the crude cake, at about 8% and 6%, respectively. The petrochemicals sector, which includes materials used more regularly in a coronavirus world, from mobile phones to packaging and hand sanitizers, has been quietly carving out a bigger share at around 19% of overall oil demand.
Source: Hellenic Shipping