Patterns of oil consumption are set to change over the next few decades, with a slow decline in some parts of the world and an increase in other regions. That's according to this year's International Energy Outlook, recently released by the U.S. Energy Information Administration (EIA).
Overall, global consumption of liquid fuels is projected to increase to 119 million barrels per day (MMbbl/d) in 2040, a rise of 38% from 87 MMbbl/d in 2010.
The report found that the greatest potential for growth in demand is seen in China, India and countries in the Middle East. Looking specifically at these expanding markets, China, India and other developing countries in Asia account for 72% of the projected net increase in liquid fuels consumption, with Middle East markets representing another 13%. Most liquid fuel demand is for industrial uses and transportation, the EIA said.
In more mature industrialized economies such as the United States, Europe and Japan, demand for liquid fuel has leveled off and is anticipated to start falling gradually over time. Reasons for this include sustained high oil prices, high taxation of motor fuels, efficiency standards for vehicles and equipment, saturation of the vehicle market and price-driven fuel switching to non-oil fuels in uses other than transportation. Structural changes in factors such as demographics and consumer behavior also play a part.
Still, with global demand for liquid fuels expected to keep on climbing, the EIA report projects that 33 MMbbl/d of additional liquid fuel supply will be needed in 2040 compared to 2010. The biggest share of this is expected to come as a result of OPEC producers increasing crude and lease condensate production. Non-OPEC production will also increase and other liquid resources — including natural gas plant liquids, biofuels, coal-to-liquids and gas-to-liquids — are likely to grow in importance, too.