No one in the petroleum business had suggested that oil demand would ever reach its peak. Then, 2020 happened and brought the coronavirus pandemic and the financial crisis. Most likely, oil use will never exceed the levels of 2019. Such a conclusion was drawn by the largest oil producers, including OPEC.
Based on the most optimistic forecasts, oil will be in demand for only a couple of decades and then go down in history. Nevertheless, many producers hope that demand for crude oil will be restored with the end of the coronavirus crisis. However, it is already clear that oil will not be able to recoup its losses ever again. The rising popularity of electric vehicles, renewable energy sources, and the environmental movement pose threats to the oil market.
For the first nine months of 2020, car sales plummeted, affecting every major automaker. Only, Tesla, the producer of electric cars, sold a record number of vehicles. In fact, electric cars, in general, managed to thrive even as sales of traditional vehicles broke down. Thus, Volkswagen and Daimler recorded a substantial drop in total sales, while sales at their EV divisions doubled.
On top of that, there is an environmental factor which many considered to be of least importance. Today, it has become a fundamental issue. Dozens of countries and metropolises across the world are now preparing to switch to safer and cleaner energy resources. For example, the US state of California and the United Kingdom plan to completely stop selling new gasoline cars by 2035. Japan and South Korea are committed to eliminating carbon dioxide emissions by 2050. Even China unexpectedly decided to go green. Hopes on aviation and shipping are fading with each coming year. Soon, small electric planes and long-distance hybrid aircraft will no longer be considered prototypes. It is just a matter of time before tankers start running on hydrogen.
