The adoption of electric vehicles (EVs) can potentially reshape global oil demand and the broader oil market.
With over 10 million EVs sold globally in 2022 and continued strong growth expected in 2023 and beyond, the impact on oil consumption is becoming increasingly pronounced.
By 2024, more than 20 countries globally are expected to see electric vehicles account for at least 5% of new vehicle registrations. While the shift towards EVs is already well-established in regions like China and Western Europe, markets in countries such as India are only beginning to gain momentum in EV adoption.
Despite this, the decline in oil demand due to the rise of EVs might not necessarily lead to lower oil prices. Factors such as reduced investment in new oil supply capacity could keep prices volatile.
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Additionally, the geopolitical landscape, including actions by major oil-producing nations, continues to influence the market. However, if the transition to EVs accelerates, it could hasten the peak in global oil demand, which some forecasts now place around 2027.
