Portuguese 
English 
Spanish 
5 min of reading 
1 comment 
Discover The Future Of Oil With The S-Curve. Analyze The Forecast From Goldman Sachs And The IEA On The Global Economic Impact And The Development Of Crude Until 2040
Every year, dozens of predictions are published that set a date for the beginning of the end of oil. The powerful surge of electric vehicles, improvements in combustion engine efficiency, or the reduced use of hydrocarbons in the industries of developed countries have led this decade to be viewed as the last in which global oil demand will rise. However, there are so many factors that can influence oil consumption over a period of years that the ‘bets’ are varied and all seem logical and grounded. One of the latest was from Goldman Sachs, which, in contrast to the consensus marked by the International Energy Agency, believes that oil demand will continue to grow for a few more years. Thus will be the last dance between oil and the economy.
Short-Term Movements In Oil
In addition to the short-term movements in oil caused by temporary changes in demand (which moves according to the economy) and supply (according to OPEC cuts and production in the Americas), oil prices can also be analyzed in the long term. The long-term scenario that appears most likely for investors and international organizations points to a global oil demand that will begin to decline by the end of this decade. The International Energy Agency (IEA) dares to establish a concrete exercise to mark the beginning of the end of oil demand: 2030 is that ‘magic’ year. In its base case, the IEA assumes that all governments will fully meet their energy and climate commitments, predicting that global oil demand will reach a peak in 2030. After that, there will only be declines in global oil consumption.
Goldman Sachs And The Last Dance Of Oil
However, Goldman Sachs economists believe that a key factor is being ignored. Everyone is focusing on the electric vehicle, energy efficiency… but few are looking at what is happening in the global economy. A large portion of the world population is about to enter an economic development phase that creates a kind of ‘sweet spot’ for oil consumption. This point is when income levels surpass the threshold that allows consumers to start traveling, flying, buying a car, and engaging in other leisure activities that rely on petroleum derivatives. A good example is India, with around 1.5 billion inhabitants who will reach the ‘sweet spot’ in the coming years.
-
China imposes billion-dollar fines on seven e-commerce platforms after violations in food delivery and pressures the sector to correct flaws that affect trust, food safety, and consumer experience.
-
With rocks that are 600 million years old and 200 years of scientific history, a cave in Minas Gerais reveals a lit cavern that seems like a dream.
-
A natural hormone may reverse obesity by increasing energy expenditure and also help in the treatment of liver diseases, researchers indicate.
-
China consolidates high-precision mapping and identifies vast mineral wealth in the eastern seabed to boost the technology industry.
“Even though the impact of electric cars on gasoline demand has received much attention, less attention has been given to the fact that the average global GDP per capita is approaching a sweet spot in the coming years; each dollar increase in earnings is likely to generate an increasingly greater demand for gasoline,” say the economists at Goldman Sachs.
The S-Curve Of Demand Growth
When viewed from a long-term perspective, oil demand growth shows a non-linear relationship with per capita income growth. In other words, higher per capita income (wealth or development) does not always lead to a proportionally higher fuel consumption. For example, each euro increase in income in a highly developed country does not significantly increase oil consumption, and sometimes even reduces it. However, in developing countries, each extra euro of income significantly ramps up fuel demand.
For this reason, Goldman Sachs economists assert that oil consumption has a relationship with income that can be represented through an ‘S-shaped curve’. This curve presents a growth pattern where oil demand increases slowly in economies with very low per capita incomes (Africa, for example), later entering a phase of positive acceleration, which grows rapidly, approaching an exponential growth rate, similar to the shape of a ‘J’; but then decreases in a phase of negative acceleration until demand stabilizes at a growth rate of zero, and eventually even declines (the final peak of the ‘S’).
Practical Examples Of The S-Curve
In a more graphical and example-based way, the beginning of the ‘S’ can be explained as follows: in a very poor country, for example, South Sudan, economic growth may translate into improvements in nutrition, clothing, housing… This growth results in a very low increase in hydrocarbon demand. However, oil demand accelerates as incomes rise and reach a low-mid level, as was the case in China in the late 90s and 2000s, or as is happening now in India. During this increase, the ‘S’ takes off upwards, before slowing down to a saturation point, which is the end of the ‘S’, reached when the economy has already achieved a high level of development, explains the Goldman Sachs report.
“Global economic growth is gradually elevating the world population on the consumption spending scale: consumption patterns evolve as individuals move from lower income levels to higher levels, thus driving an increasing demand for oil up to a point… If we analyze by region, it is likely that emerging markets in Asia will drive most of the global oil demand growth in our forecast,” the Goldman Sachs team comments.
India And China Devour Oil
“We anticipate that China will positively contribute to global oil demand until it reaches its peak in the late 2020s. In the case of India, although our specialized motor team expects a rapid electrification of India’s two-wheeled vehicles (which account for over 50% of India’s gasoline consumption), as well as cars, the solid expansion of India’s passenger vehicle fleet will offset this impact, leading to continued growth in transportation fuel demand in India throughout the forecast,” these specialists explain.
With all these data, Goldman’s economists arrive at the big conclusion: there is still a whole decade left until the peak of oil demand. We have raised our demand forecast for 2030 to 108.5 million barrels per day. We believe that peak demand or peak oil will not arrive until 2034. Not only will it come later, but demand will stagnate at highs (110 million barrels per day) until 2040, at which point it will begin to gradually decline.
Our outlook for oil is more optimistic than that of the IEA, which predicts that oil demand will peak before 2030. Moreover, if we “include a scenario of slow adoption of electric vehicles, given the recent stagnation of electric vehicle sales, this would imply that oil demand would continue to increase until approximately 2040, peaking at 113 million barrels per day.
Observo que os autores da matéria não deram a devida importância à nova matriz energética que surge no horizonte: o hidrogênio verde