With the arrival of new and more interesting technologies, such as electric vehicles, the reign of oil begins to decline.

It is not new that the market of oil began to have a headache due to the emergence of new and more interesting technologies. It is not difficult to predict that, over time, the popularization of alternatives that use renewable energy would start to fall in the taste of the population. Evolution is the right path, even when we are dealing with numerous variables such as the oil industry. And, by all indications, the role of fossil fuels such as oil, even though it lasted a long time, has its days numbered. This is a reflection of the arrival of electric vehicles, which have been dominating the automotive market and consolidating themselves as incredible alternatives for a new era of global renewable energy.

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The scenario of decline of the reign of oil

Several factors, such as the pandemic, these energy transition processes and increasingly efficient means of transport are revolutionizing the way people move around, especially in large cities. Gasoline demand, which collapsed in 2020 due to lockdowns, had already started to decline the previous year and, even with the Covid-19 emergency overcome, is unlikely to return to the levels of two years ago.

“Oil demand will evolve in three phases. Until 2025, oil demand is still affected by the impacts of Covid-19 and the electric vehicles still take time to take off. Then, from 2025-2035, structural declines and replacement impacts – especially on trucks – take hold, and finally around 2050, plastics recycling and accelerated technologies in the marine sector will be the final transition step, further reducing oil demand to 51 million bpd by 2050 in our average case,” said Rystad Energy Oil Markets Analyst Sofia Guidi Di Sante.

Main sectors that will be affected by the change in oil demand

Get to know some of the sectors that have a high demand for oil:

• Road transport (passenger, bus and cargo vehicles): as it accounts for more than 48% of total fossil fuel demand, this will be the sector that will guide this change in the scenario.
• trucks: accounting for 18% of the oil demand range, this will not be the fastest sector to make the transition, but it will be decisive to raise, and a lot, the numbers of this change.
• petrochemical products: account for 14% of total fuel demand. Unlike other sectors, it should grow at least until the mid-2030s.
• maritime sector: this sector accounts for 6% of total demand and should be dominated by oil until the mid-2030s. However, after that it may show changes opting for LNG, hydrogen, electric batteries and other carbon neutral vessels, especially in newbuilds.
• Aviation: the demand for 7% of the fuel is expected to continue growing for at least until 2050, if only for the reason that there is, today, no viable oil replacement technology.

Electric vehicles and the near future

As much as big names in the oil industry still don't see the electric vehicles as an alternative that will permanently replace the models that use fossil fuels, is not what the big automakers demonstrate. Tesla, Chevy and Nissan have plans to start selling electric cars, with long range, in the $30 range. Other manufacturers and technology companies are also investing billions in a variety of new models. Already at the beginning of this decade, some of them will be cheaper and will have better performance than gasoline cars. This is a strategy to gain market share and represents a larger portion of the population having access to this type of technology.

In 2015, the sale of electric vehicles in the world had an increase of around 60%. This percentage, in addition to showing the strength with which these new models, which bet on renewable energy as a source, are winning in the market, it still shows how this transition can happen faster than we imagine. It's an interesting percentage, as it is roughly equivalent to Tesla's annual sales growth rate through 2020, and it even coincides with the rate that drove the Ford Model T to leave horses and wagons behind in the 1910s. , a segment that brings the same scenario perspective, solar panels have followed a similar curve, with an annual growth of around 50%, while sales of LED lamps have been expanding at an impressive 140% a year.

With the oil crash getting closer and closer, and a scenario that has been taking shape in recent years, which directs us towards cleaner and renewable alternatives being the true protagonists of our daily lives, all that remains is for us to embark on the wave of the future. And, what we can bet is that the numbers of eletric cars in circulation will only increase, while the demand for oil loses steam. That way someone with the barrels will be watching ships.