Oil Demand by Sector
Oil Demand by Sector
This page explores in more detail the sectoral distribution of the Reference Case oil demand outlook. The transportation sector, covering road, air, internal waterways and international bunkers, is the main sector for oil use, responsible for 59% of all oil use in 2011 (Figures 1–4). This share is set to grow, with the Reference Case projecting a rise to 63% of all oil demand by 2040. These figures, are based upon the calorific use of oil, not volumes. Given this number for transportation means that just over 40% of oil consumed in 2011 is in the other sectors. The petrochemical industry and other industrial usage accounted for one-quarter of all oil used in 2011, while residential and agriculture, together with some consumption in the commercial sector, contributed to 10% of the consumption. Little oil is used to produce electricity, with only 6% of total oil use in this sector, although some OPEC countries use Signiant amounts of oil to produce electricity.
Figure 1. Percentage shares of oil demand by sector in 2011 and 2040, World
Figure 2. Percentage shares of oil demand by sector in 2011 and 2040, OECD
Figure 3. Percentage shares of oil demand by sector in 2011 and 2040, developing countries
Figure 4. Percentage shares of oil demand by sector in 2011 and 2040, Eurasia
In looking at the demand for oil in the road transportation sector, it is necessary to distinguish between passenger cars and commercial vehicles. Indeed, the drivers of oil demand, such as the demand for mobility, vehicle fuel efficiency and fuel switching possibilities, are in many ways different for these two categories.
Moreover, they are set to evolve differently too. The following section explores these elements in detail.
Passenger car ownership
There were 940 million passenger cars in the world in 2011. Almost two-thirds of the cars in 2011 were in OECD countries (Figure5). However, from 1970–2011 the rising car stock in developing countries significantly increased its overall share, from under 6% of all cars in 1970 to 28% in 2011. This trend is set to continue.
The story behind recent car stock movements underscores the shifting importance from OECD to non-OECD. Figure 2.6 clearly shows that, over the years 2000–2011 the increase in the number of passenger cars on the road has been predominantly in non-OECD countries. Moreover, the most dramatic increase has been in China, rising by more than 63 million over the period 2000–2011, or a 21% average yearly growth rate. The BRIC countries (Brazil, Russia, India and China) accounted for 43% of the global rise.
Despite the rapid rise in volumes, car ownership in China in 2011 was still as low as 53 cars per 1,000, in India it was just 12 per 1,000. Car ownership in OECD countries, on the other hand, averaged 489 per 1,000 people in 2011. Table 2.1 and Figure 2.7 emphasize these differences. Looking to the future, contrasting car ownership trends are foreseen between developed and developing countries. In the OECD, the growth in car ownership is already slowing due to saturation effects. This is reflected in Figure 2.8, where the average annual growth of car ownership per capita is seen to have fallen from 1.9% p.a. in the 1980s to 0.7% p.a. in the first decade of this century. In contrast, the growth in developing countries has, in general, been accelerating, from 3.7% p.a. in the 1980s to 6% p.a. over the period 2000–2011, despite rapidly growing populations. Saturation will also begin to play a role in the next 25 years in some non-OECD areas; thus, a non-linear approach is used to estimate growth potential in some regions, such as Latin America.
Figure 5. Passenger cars, 1970–2011
Figure 6. Increase in passenger cars, 2000–2011
Figure 7. Passenger car ownership per 1,000 people, 2011
Figure 8. Average annual growth in car ownership per capita
It is interesting to note the historical pattern of car ownership in South Korea and Japan as per capita GDP has risen. The experience of these two countries has ‘fused’: South Korea appears to be following the Japanese model. If the Chinese experience is superimposed onto this, the implication is that with Chinese GDP per capita reaching $34,000 (2005 prices) by 2040, car ownership levels would rise to more than 500 per 1,000 by then (Figure 2.9). This implies improbable and dramatic sustained increases in car sales of up to double the current global sales. Moreover, congestion problems would probably increasingly become a constraint.
Table 2.2 shows the Reference Case projections for passenger car ownership. The global car parc is expected to more than double already by 2035, compared to 2011 levels. It reaches more than 2.1 billion cars by 2040. Over the period 2011–2040, OECD countries see the volume of passenger cars rise by close to 130 million. In developing countries, the rise is inevitably more dramatic, with more than a billion additional cars over this period (Figure 2.10). By 2026, there will be more cars in developing countries than in the OECD. And 68% of the increase in cars over the period 2011–2040 will be in developing Asia.
The largest rise in passenger car volumes is in China, with an increase of more than 470 million between 2011 and 2040 (Figure 2.11), as car ownership moves from 53 cars per 1,000 in 2011 to over 380 cars per 1,000 in 2040, similar to many OECD countries in the 1990s. The next largest rise is in India, with an increase of around 200 million cars, resulting in a car ownership of 134 cars per 1,000 in 2040. Outside of developing Asia, the group with the largest increase in passenger car ownership is OPEC, with an increase of more than 110 million cars over the years 2011–2040.