Shift toward EVs, particularly in China, could disrupt global oil market, energy report says

An increasing shift toward electric vehicles globally, especially in China, is poised to disrupt the global oil market, according to a report released Wednesday by the International Energy Agency.

In recent years, China has accounted for most of the growth in oil demand and planet-heating emissions, but electric vehicles now make up 40% of new sales of cars there, and 20% of sales globally, putting major oil and gas producers “in a bind.”

The IEA World Energy Outlook 2024 outlines a future where EV adoption continues to gain momentum, potentially displacing up to 6 million barrels per day of oil demand by 2030. The agency said based on current trends and policies and the availability of materials, EV will reach 50% of global car sales in 2030.

China already accounts for half the world’s electric cars on the road. By 2030, it’s projected that 70% of new car sales in China will be electric. With its massive additions of new wind and solar power, China is aligned with its target for addressing climate change, seeing emissions peak and begin to decline by the end of the decade.

The clean energy expansion, however, is happening alongside a rise in demand for electricity, including power produced by burning coal, according to the IEA. “This has meant that even as we saw record growth in clean energy installations and additions, emissions kept increasing,” said Lauri Myllyvirta, lead analyst at the think tank Centre for Research on Energy and Clean Air.

Electricity demand is growing even faster than expected, “driven by light industrial consumption, electric mobility, cooling, and data centres and AI,” the report said. The contours of switching heating, vehicles and some industry over to electricity, it said, are beginning to become clear.

Globally, the IEA said that the expansion of wind and solar power alongside the increasing adoption of EVs will ensure a peak in demand for coal, oil and gas within the decade, with carbon emissions also reaching their highest point and ramping downward. Scientists have long warned that the world must sharply cut emissions of greenhouse gases to stave off the worst impacts of climate change.

As China’s rapid switch to electricity plays a significant role in disrupting the oil market, oil companies find they can sell more of their product to India. The IEA projects that India will add nearly 2 million barrels per day of oil to its demand by 2035, potentially offering a lifeline to oil producers looking to offset…