Connect with us

Hi, what are you looking for?

CleanTechnica

Cars

How Will Growing EV Demand Affect Oil Demand?

Originally published on EV Obsession.

Could mainstream electric vehicle adoption result in a significant drop in crude oil demand? While some impact would of course be expected with large-scale adoption, could the impact be larger than is currently supposed?

An interesting new article published over on Seeking Alpha explores these questions, and provides in-depth descriptions of some interesting possible scenarios.

Stock bubbles


 

According to the analysts over there, roughly 39 million electric vehicles (EVs) and plug-in hybrids (PHEVs) will be on the roads in the US by 2030. A fleet of this size would lower gasoline consumption by around 17.2 billion gallons a year (the electrics would use about 180 terawatt-hours of electricity a year instead).

The analysts note that this would have a very bearish impact on gasoline demand, and therefore crude oil prices — and that most current market players “have difficulties understanding how sizable the impact electric cars could make on crude oil demand and price in the long term is.”

Owing to this prediction, the analysts note that investing in other commodities, rather than crude oil, might be a better choice over the long-term.

ev forecast

Here’s more, direct from that article:

In the United States 71% of the petroleum products consumed are used in transportation. Only 1% is used to produce electricity and 28% goes to the industrial, residential and commercial uses. Let’s discuss how big impact electric cars could make on the gasoline consumption.

How much would such a sizable electric fleet impact the gasoline and electricity demand? Electric fleet would save annually some 17.2 billion gallons of gasoline (~$39.5 billion at the pumps by current prices) by 2030. That corresponds to 0.4 billion barrels and it would be ~13% against the current level of gasoline consumption. Electric fleet would increase the electricity consumption by ~180 TWh. That is equivalent to ~3% of the current annual electricity consumption in the US.

…We believe that other asset classes and commodities might be better investments than oil in light of the fundamentals discussed in this article for the next 10-15 years. We recently wrote a bullish article on the agricultural commodities where the fundamentals look much better in our opinion.

There’s a lot more in the original article, some of it quite interesting (even if I don’t agree with everything). Probably worth a look for most… or at least anyone who has invested in oil companies.

Image Credit: Public Domain; Seeking Alpha

 
Don't want to miss a cleantech story? Sign up for daily news updates from CleanTechnica on email. Or follow us on Google News!
 

Have a tip for CleanTechnica, want to advertise, or want to suggest a guest for our CleanTech Talk podcast? Contact us here.
Advertisement
 
 

Written By

James Ayre's background is predominantly in geopolitics and history, but he has an obsessive interest in pretty much everything. After an early life spent in the Imperial Free City of Dortmund, James followed the river Ruhr to Cofbuokheim, where he attended the University of Astnide. And where he also briefly considered entering the coal mining business. He currently writes for a living, on a broad variety of subjects, ranging from science, to politics, to military history, to renewable energy.

Comments

You May Also Like

Cars

The oil price shock of 2022 has driven a great deal of new interest in EVs, which has just served to help answer the...

Cars

The price of a gallon of gasoline is surging, putting a strain on drivers’ pocketbooks. While prices at the pump seem extreme, we’ve been...

Fossil Fuels

Middle Eastern oil producers are worried that more people will buy EVs in light of the high oil prices. Iraq’s oil minister, Ihsan Abdul...

Cars

Although the current EV market appears to concentrate on the left-hand-drive markets of the USA, Europe and China, a significant number of earth’s citizens...

Copyright © 2023 CleanTechnica. The content produced by this site is for entertainment purposes only. Opinions and comments published on this site may not be sanctioned by and do not necessarily represent the views of CleanTechnica, its owners, sponsors, affiliates, or subsidiaries.