China’s EV Revolution Hammers Demand For Oil

The global oil market is approaching a turning point as China’s electric vehicle boom accelerates the decline of gasoline-powered cars, the International Energy Agency (IEA) warned.

OPEC has been voluntarily cutting supply for several years to support prices. I Photo: BYD

World oil demand will grow by only 700,000 barrels per day in 2025, reaching just under 103 million barrels daily, Hans van Leeuwen reported for The Telegraph.

Despite the slowdown in demand, major producers are moving to ramp up supply. According to the IEA, the Organization of the Petroleum Exporting Countries (OPEC) is on track to boost output by 2.1 million barrels per day this year, bringing total daily production to 105 million.

“We are at a really interesting turning point in the market just now. Peak oil demand is on the horizon,” said Kieran Tompkins of Capital Economics.

OPEC has been voluntarily cutting supply for several years to support prices. But Saudi Arabia is now leading a push to increase production in an effort to regain market share from the U.S. and other non-OPEC producers.

In June, the Saudis raised output by 700,000 barrels per day to 9.8 million. The move also aims to preempt potential supply disruptions following Israel’s attack on Iran.

UAE Energy Minister Suhail al-Mazrouei said this week that the market remains “thirsty” for OPEC oil, as evidenced by the lack of stockpiling even as production rises. OPEC forecasts demand will grow by 1.3 million barrels per day in 2025—nearly twice the IEA's projection.