Sep 30, 2020 - Energy & Environment

Total joins the peak-demand-is-near club

Illustration of oil barrels on a roller coaster. 
Illustration: Aïda Amer/Axios

The hottest 2020 trend is moving up your projections of the global oil demand peak.

Driving the news: Oil major Total, in a new analysis, sees demand growth ending in a decade and then declining in their "momentum" scenario.

  • That's a world with some action on climate change, but not nearly enough to meet the targets of the Paris Agreement.
  • In their "rupture" scenario — aggressive policies coupled with tech breakthroughs — oil demand peaks "by 2030" and then falls to less than half of today's levels by 2050.

The big picture: Multiple analysts are accelerating their projections of when oil demand will stop growing, and some are more aggressive than Total.

  • A recent BP analysis sees that plateau early this decade — or even demand never reaching its pre-pandemic levels if the world acts aggressively on carbon.
  • A DNV GL report this month also predicts peak already happened.

Why it matters: The peak's timing and the slope of its decline will affect emissions, corporate strategies and the finances of oil-producing nations.

Yes, but: The idea that peak demand is imminent isn't mainstream, even as the pandemic shakes up long-term analyses.

What we're watching: Keep an eye on what the International Energy Agency says in its long-term outlook next month.

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