Plastics and other petrochemical products will drive global oil demand to 2050, offsetting slower consumption of motor fuel, reported the International Energy Agency (IEA).
Oil demand for transport is expected to slow down by 2050 due to the rise of electric vehicles, however that decline would be offset by demand for petrochemical products. The rapid growth of emerging economies such as India and China are expected to propel demand for petrochemicals. Petrochemicals form the building blocks of products ranging from plastic bottles and beauty products to fertilizers and explosives.
Petrochemicals are expected to account for more than a third of global oil demand growth by 2030 and nearly half of demand growth by 2050. Global demand for petrochemical feedstock accounted for 12 million barrels per day (bpd), or roughly 12 percent of total demand for oil in 2017. The figure is expected to grow to almost 18 million bpd in 2050 with most demand growth taking place in the Middle East and China, where big petrochemical plants are being built.
Exxon Mobil and Royal Dutch Shell plan to invest in new petrochemical plants in the coming decades, betting on rising demand for plastics in emerging economies. Major producers in the Middle East are also investing in large petrochemical plants because it can be more profitable by converting crude oil directly into plastics rather than oil products such as gasoline and diesel.
Plastic waste is known to make its way into oceans where it harms marine life, prompting several countries to ban or tax single-use plastic bags. However, this will have little effect on petrochemical demand. The IEA report says:
Although substantial increases in recycling and efforts to curb single-use plastics take place, especially led by Europe, Japan and Korea, these efforts will be far outweighed by the sharp increase in developing economies of plastic consumption.