BP: Oil demand will peak in 2030, five years later than previously forecast

BP on Tuesday reiterated a shift in its global energy forecast, saying demand for crude oil will peak in 2030, five years later than the company's previous estimate. The latest Energy Outlook projects global oil demand reaching about 103.4 million barrels per day (bpd) in 2030, before sliding to roughly 83 million bpd by 2050. By contrast, last year’s forecast suggested a peak around 102 million bpd in 2025. The revision underscores what BP sees as a slower transition away from fossil fuels than some analysts anticipated and a continued need for oil even as low-carbon power expands.

Chief economist Spencer Dale, who helped craft the outlook, said the revision reflects a slowdown in improvements in energy efficiency that has kept overall energy use higher than previously expected. “The world is consuming more of all kinds of energy. The trends that underpin that demand help determine what will be produced and consumed in the years to come,” Dale said. He also highlighted potential risks to the forecast from geopolitical tensions and policy choices that could alter energy security strategies around the world, including the war in Ukraine and tariff dynamics that could affect energy trade. The outlook also notes growing fragmentation in energy geopolitics could push some countries toward greater use of electricity generated from low-carbon sources while others lean more on domestic fossil resources.

The forecast aligns with BP’s strategic shift under new chief executive Murray Auchincloss, who has steered the company back toward a stronger emphasis on oil and gas after the tenure of former boss Bernard Looney, who pursued a broader renewable energy strategy. Analysts have noted that the leadership change reflects a broader industry tug-of-war between maintaining near-term cash flow from fossil fuels and investing in the energy transition. Auchincloss has signaled a more traditional energy mix focus, arguing that market realities and capital discipline require continued investment in oil and gas alongside lower-carbon options.

Dalealso pointed to another potential driver of higher energy demand: the rapid growth of data centers to support artificial intelligence applications. He quoted the report: “The seemingly exponential growth in data centres to support the increasing use of artificial intelligence applications provides an important new source of energy demand, especially in some markets such as the US where growth in power demand over the past decade virtually stalled.” This dynamic could add to already robust demand for electricity and, by extension, the fuels that power some electricity generation and industrial processes.

The Energy Outlook does not provide a single-path view; instead, it outlines a range of scenarios that depend on policy choices, technology breakthroughs, and economic growth. It notes that tensions and policy shifts could push some economies to accelerate electrification and switch away from imported oil, while others may rely more heavily on domestic fossil resources and less on energy imports. In markets where oil remains central, price signals and investment in oil supply will continue to influence the trajectory of demand through mid-century.

The report’s conclusions come as Britain’s energy policy remains under scrutiny. Energy Secretary Ed Miliband has faced criticism from industry groups for a ban on new North Sea drilling and for windfall taxes that some argue discourage investment in UK oil and gas production. BP notes that policy environments will shape supply decisions and the pace at which countries can reduce reliance on imports and shift toward greater use of electricity from low-carbon sources. The outlook therefore adds another layer to the policy debate in the UK and beyond about how to balance climate objectives with energy security and industrial competitiveness.

In discussing the broader energy transition, BP emphasized that even with rapid growth in wind and solar, the incremental efficiency gains in energy use have not accelerated as quickly as hoped, leaving oil and other fossil fuels playing a larger role for longer. Dale said the mix of demand drivers—industrial activity, mobility, heating, and electricity generation—will determine what gets produced and consumed in the years ahead. The company’s updated view adds to a chorus of forecasts suggesting a slower peak for oil than some climate-focused projections would prefer, a reality that could influence investment strategies across the energy sector.

As BP’s outlook unfolds, analysts will watch for signals about capex in oil and gas, policy shifts in major markets, and the evolving balance between fossil fuels and renewables. The degree to which AI-driven electricity demand and potential geopolitically induced shifts in energy security will affect the aggregate demand for oil remains a key uncertainty for producers, policymakers, and investors alike. With the energy transition continuing to unfold, the outlook indicates that the global journey away from fossil fuels may be more protracted than the market has anticipated, at least in terms of peak oil demand.