BP pushes peak oil demand to 2030, signaling slower energy transition

Global oil demand is not expected to peak until 2030, BP said in its latest annual Energy Outlook, pushing back the peak by five years from last year’s projection that it would occur this year. The forecast calls for demand to reach about 103.4 million barrels per day by 2030 and then fall to roughly 83 million bpd by 2050.

The revision is driven in part by slower improvements in energy efficiency, which BP says means more oil will be required than previously expected. Chief economist Spencer Dale, who compiled the outlook, cited a period of “sustained weakness” in efficiency gains over the past five years and noted that the trends underpinned a continued steady growth in fossil fuels despite rapid growth in low-carbon energy, led by solar and wind. “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, adding that the pace of efficiency gains has weakened relative to prior assumptions.

BP’s leadership transition sits at the heart of the forecast’s framing. The group has shifted away from a prior emphasis on renewable-heavy growth under former chief executive Bernard Looney, with new chief executive Murray Auchincloss steering the company back toward oil and gas. The strategic change reflects a broader debate among investors and policymakers about the path to energy security and the pace of the transition to low-carbon power.

The outlook also arrives as UK policy terrain remains politically sensitive. Energy Secretary Ed Miliband’s stance on offshore North Sea drilling, alongside windfall taxes on oil and gas profits, has drawn scrutiny from industry groups concerned about investment and capability to maintain supply. The BP projection could add to debates about how quickly domestic fossil fuel production should be constrained versus how to ensure reliable energy, particularly in a period of geopolitical uncertainty.

Beyond the UK, the report highlights how global tensions could shape energy trading and investment. The war in Ukraine, fluctuations in tariffs, and broader geopolitical fragmentation could prompt countries to reduce reliance on imported oil and gas and accelerate transitions toward greater electrification and local energy supplies. Yet the balance is nuanced: nations rich in fossil fuels could also lean more on domestic resources rather than importing equipment for renewable energy infrastructure, partially offsetting global cuts in oil demand.

AI and data centers are identified as a notable new driver of energy demand. Dale emphasized that the seemingly exponential growth in data centers supporting AI applications provides an important incremental source of energy demand, particularly in markets like the United States where power usage growth over the past decade has been relatively muted outside digital infrastructure. This factor, while smaller than the overall supply-and-demand dynamics for liquids and power, could influence near-term load growth and grid planning as technology sectors expand.