How do electric cars affect the oil market?
Despite the considerable funds invested in the development of electric motors, the driving force of world transport is still oil products, the combustion of which causes great harm to the environment.
But it seems that quantity gradually turns into quality. We are not talking about gasoline yet, but apparently, the position of diesel fuel will gradually weaken and electricity will replace it. According to experts, by the end of 2019, the demand for diesel fuel could fall by 270 thousand barrels per day, and the spread of electric buses, most of which are located in China, should lead to this.
... 9 years ago at the industry conference in Belgium, the Chinese manufacturer presented an early model of the electric bus, which was perceived almost as a joke, a toy. But soon, battery-powered buses became a serious problem for refiners, able to revolutionize urban transport and transform the energy industry.
The numbers are staggering. In 2017, China accounted for about 99 percent of the 385,000 electric buses on roads around the world, representing 17 percent of the entire fleet of the country. According to Bloomberg New Energy Finance, every five weeks, 9,500 zero-emission transporters are added to cities in China - the equivalent of an entire London operating park.
China is currently leading in electrification of its giant bus fleet (99% of about 400,000 electric buses on roads worldwide, which is 17% of China’s entire fleet), since the country is also the world's leader in terms of emissions of pollutants into the air. And the lion's share of these emissions comes from buses that run on diesel. If we consider that every thousand electric buses will drive out about 500 barrels of diesel fuel per day from the market, the figure of 270 thousand barrels of diesel fuel per day is not so unattainable, especially for China.
So far this question concerns only buses, since medium-sized cars, which can be replaced by electric vehicles, generally consume 30 times less fuel than buses. But over time, this process will affect cars.
According to Bloomberg, in the future, the influence of the electric car and electric bus market on the oil market will only grow. Thus, according to the agency's forecast, by 2040 electric vehicles can displace up to 6.4 million barrels per day of demand for oil, while increasing fuel efficiency will reduce another 7.5 million barrels per day.
Here everything is interconnected. The more people use fossil fuels, the more severe the environmental problems will be, which will force humankind to take faster measures to avoid using this fossil fuel.
Increased environmental awareness and improved battery technology are forcing oil and gas companies to prepare for the onslaught of electric vehicles. As a result, in an effort to work on a different playing field and compete with tech-savvy colleagues, oil and gas companies are diversifying their activities in the areas of power and battery generation, areas where demand will increase with the growth of electric vehicles.
For example, the Norwegian oil company Statoil rejected the “oil” component in its name and renamed itself “Equinor”, denoting that it leaves the oil and gas business mainly for renewable energy projects in order to reduce its carbon footprint and look more relevant in the emerging energy industry.
Nury AMANOV
