Global oil demand is projected to peak at 107.5 million barrels per day in 2030 before gradually declining to 88 mmbbls/d in 2050, as electrification and energy substitution primarily limit fossil fuel consumption despite strong economic growth, Rystad Energy said Monday.
The figures reflect Rystad's base case scenario, showing "resilient" near-term demand that becomes "increasingly differentiated" beyond 2030. A high case indicates stronger demand above 107 mmbbls/d at mid-century, while a low case reflects 66 mmbbls/d.
"Transport remains the largest source of long-term uncertainty given its continued dependence on liquid fuels," Rystad said.
Road transport will mainly cause demand destruction, with passenger vehicle fuel demand declining by about half to 14.3 mmbbls/d in 2050 from 27.8 mmbbls/d in 2025 in the base case, the firm noted.
China will lead fuel substitution because of rapid fleet renewal and electric vehicle adoption. Europe and other regions, meanwhile, will see a slower transition due to vehicle turnover delays.
On the supply side, Rystad's base case shows a peak of 112 mmbbl/d in 2027, as deepwater oil fields drive growth. By 2050, production will likely drop to 89 mmbbl/d primarily due to natural decline.
The firm highlighted that significant investment is needed to offset natural decline and sees the need to develop 470 billion to 630 billion barrels of new resources to meet demand by 2050. The base case scenario requires annual investment of $450 billion to $500 billion after 2030.
"The long-term price outlook reflects the cost of developing sufficient supply to replace declining production," Rystad said.
Marginal costs in the base case are projected to rise to about $85 per barrel by 2045 from around $50/bbl in the early 2030s, as high-cost resources will be required to meet demand in the long term.