China will drive the world’s growth in oil demand in the next two decades and in 2027 will overtake the US as the world’s top oil consumer, BP PLC said on Wednesday.
BP, in its Energy Outlook 2030 report, also said oil was set to be the slowest-growing fuel in the next 20 years, restrained by higher prices and a gradual move toward market rather than subsidized fuel prices in emerging economies.
World demand will rise to 103 million barrels per day (bpd) by 2030, up 18 percent from 2010, BP said. More than half of the rise in liquid fuel demand is in China, which BP expects to overtake the US as the top oil importer by 2018.
BP’s prediction underlines the gradual shift of growth in oil use toward Asia and away from the West. China is already the world’s largest energy user, having surpassed the US in 2010, according to the International Energy Agency (IEA).
While highlighting China and India’s continued growth, BP’s report is a further illustration of the decline in long-term oil demand estimates in the last few years, coinciding with higher prices. Oil hit a record high of US$147 a barrel in 2008 and remains well above US$100.
“Oil, the world’s leading fuel today, will continue to lose market share throughout the period,” BP said. “In China, growth of energy use is expected to slow significantly after 2020 as the economy matures.”
Even so, the world still needs to bring on enough oil, biofuels and other liquids to meet a forecast demand increase of 16 million bpd by 2030 and replace falling output from existing sources, BP said.
This is the second year BP, a publisher of benchmark energy statistics for 60 years, has issued its long-term energy outlook. As recently as 2007, the IEA expected the world would need 116.3 million bpd of oil by 2030.
Demand growth will come entirely from outside developed countries of the Organisation for Economic Co-operation and Development (OECD), BP said, although a lifting of fuel subsidies is expected to be among the factors that will restrain demand.
“Overall, consumption growth will be constrained by stronger crude oil prices seen in recent years, technological advances, a range of new policies and the continued, gradual reduction of non-OECD subsidies,” BP said.
China and India will become the world’s largest and third--largest economies and energy consumers by 2030, BP said. The US is currently the world’s largest economy.