Wood Mackenzie Sees Gasoline Demand Plummeting This Year

Global gasoline demand is set to decline sizeable this year, according to Wood Mackenzie, driven by greater adoption of electric vehicles, the consultancy said, as quoted by Reuters.

"Penetration of electric vehicles has been increasing in the U.S. and China," Wood Mac analyst Sushant Gupta said. "For this year Chinese demand will grow by only 10,000 bpd, due to higher EV uptake."

EV sales in China are seen by some local analysts rising by 24% this year to a total of 11 million vehicles. This would be a slowdown from last year’s 36% sales increase, which translated into 7.7 million cars, and an even greater slowdown from 2022 when EV sales shot up by 90%.

U.S. EV sales, which Wood Mac also cited as a driver of the gasoline demand slump it predicted, are growing a lot more slowly. In the first quarter, EV sales registered a modest 2% increase on the year, which translated into 102,000 vehicles. That’s not exactly the sort of number that could undermine gasoline demand but it appears Wood Mac expects an acceleration in EV sales during the rest of the year.

All in all, the consultancy expects global demand for gasoline to add 340,000 barrels daily this year, for a total of 26.5 million barrels daily. This would be about half of last year’s growth rate, which stood at 700,000 barrels daily. According to Wood Mackenzie, this reflects China nearing its transport sector fuel demand peak and the United States passing that peak.

Another energy consultancy that Reuters quoted in its report, Rystad Energy, also sees gasoline demand growth slowing substantially this year in comparison to last year when post-pandemic recovery drove demand growth of 700,000 bpd.

The International Energy Agency went further in its predictions, saying last year that it expected Chinese gasoline demand to peak this year at some 3.7 million barrels daily.

By Irina Slav for Oilprice.com

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