Oil bosses see peak oil demand on the horizon

The chief executives of major oil companies expect crude demand to start peaking in the next 10-15 years, driven by a transition to gas and renewable energy resources.

"We are expecting transport demand to peak first and for that to happen probably around about 2030, for total oil demand to peak a few years after that because of the continued petrochemical growth," trading firm Vitol's chief executive Russell Hardy said during the Asia Oil & Gas Conference in Kuala Lumpur, Malaysia.

"We are estimating something like 12mn b/d of more growth to come out to about 2030-2032… at which point our expectation is that it plateaus and starts to turn down," Hardy said.

Oil demand could peak in the next 15-25 years at between 110mn-120mn b/d, forecast the president and chief executive of Thailand's state-controlled PTT Chansin Treenuchagron.

But technological developments in the oil and gas industry could change the time horizon for peak oil demand, said the chairman of India's state-controlled IOC Sanjiv Singh.

"Whatever we are anticipating peak demand today is based on the technologies which are available today. If five years down the line, seven years down the line, things do change... I think the peak will get shifted. Either it might get advanced, it might get postponed," Singh said.

A full-scale trade war between the US and China is the biggest demand side challenge the oil industry is facing, said the chief executive of Malaysia's state-owned Petronas Zulkiflee Wan Ariffin. "A trade war is no good for anybody. We estimate around $600bn will be wiped out from the global economy if this escalates."

Diesel demand in Europe is expected to recede in the passenger vehicle sector, as well as the last-mile transport sector as use of electric vehicles grows, Hardy said. The expected slump in demand for diesel as a transport fuel will present a challenge for current refinery configurations, which are now geared towards maximising diesel production, he added.