Tesla boss predicts turning point for global oil demand

Tesla boss predicts turning point for global oil demand

According to the controversial boss of the electric car specialist Tesla, Elon Musk, the demand for oil will decrease within five years. But not everyone agrees.

Elon Musk, the CEO of electric car specialist Tesla, has boldly predicted that global demand for oil will slow by the end of this decade.

While “peak oil” is the theory that global oil production is reaching its maximum available output, the Tesla boss instead said demand for oil will peak within five years (by 2028).

Mr Musk was responding to a report about a bank boss in the US saying oil will be needed in the next 50 years.

“While there will be a long useful life, it will peak long before that,” he wrote Twitter – the social media platform for short messages, which he bought in October 2022.

“Peak oil demand is likely to be reached within the next five years.”

However, oil industry analyst and commentator Anas Alhajji was quick to dispute Mr Musk’s prediction.

“Please allow me to present you with a large body of evidence that global oil demand will NOT peak in the next five years, not even 10 years, not even 20 years.” Mr. Alhajji wrote.

“To keep oil demand at current levels [of 100 million barrels per day]we need 700+ million [electric vehicles] on the streets.”

But despite the disagreements, Mr Musk’s comments echo an International Energy Agency (IEA) report that predicts oil demand will level off around 2025, before beginning to fall midway through this century.

“For the first time ever, a [World Energy Outlook] Scenario based on today’s prevailing political attitudes … global demand for every fossil fuel will peak or plateau”. This was announced by the IEA in a statement from October 2022.

“In this scenario … rising EV sales cause oil demand to level off in the mid-2030s before declining slightly by mid-century. This means that from the mid-2020s to 2050, total fossil fuel demand will decline steadily on annual average, roughly equivalent to the lifetime output of a large oil field.

“The declines are much faster and more pronounced in the more climate-focused scenarios of the WEO.”

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Ben Zechariah

Ben Zachariah is a veteran Melbourne-based writer and motoring journalist who has worked in the automotive industry for over 15 years. Previously a truck driver, Ben completed his MBA in Finance in early 2021. He is considered an expert in the field of classic car investments.

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