Why Canada Needs to Plan for a Steep Decline in Global Oil Demand

The document analyzes global oil demand scenarios from the IEA and CER, concluding that climate policies and technological shifts—particularly in road transport—will lead to a permanent decline in oil demand starting before 2030. It highlights that road transport, the largest consumer of oil at 44%, is seeing an exponential shift toward electric vehicles. Other sectors, including buildings, power, aviation, shipping, and plastics, are also expected to contribute to demand destruction, though at different paces. The brief asserts that Canada must prepare for this structural decline to ensure economic resilience.

• Global oil demand is projected to peak by 2030 or earlier, with the IEA's Net-Zero (NZE) scenario showing demand falling to 70 mbpd by 2030 and decreasing by 2.4 mbpd (or 5.3%) annually until 2050.
• Road transport is the primary driver of oil demand at 44% of the total, and the transition to electric vehicles (EVs) is expected to cause a significant displacement of oil demand before 2030.
• Even under the Canada Energy Regulator's (CER) relatively unambitious 'Evolving Policies Scenario', Canadian crude oil production is projected to peak in 2032 and then decline at an average annual rate of 1.1% to reach 2018 levels by 2050.
• The sectors of buildings and power, which together account for 13% of global oil demand, are expected to see demand drops by 2030, with a reduction of 5.8 mbpd in the IEA's Net-Zero scenario.
• While petrochemicals (19% of demand) and aviation/shipping (12% of demand) are less likely to see drastic reductions by 2030, they are expected to contribute significantly to falling demand in the medium term post-2030 due to plastic pollution regulations and net-zero aviation pledges.
• Combining a Net-Zero trajectory for road transport with a more conservative 'Announced Policies' trajectory for other sectors would result in a 22% drop in oil demand from 2019 levels by 2030, and a 58% reduction by 2050.

APA

Cosbey,, A. (2022). Why Canada Needs to Plan for a Steep Decline in Global Oil Demand. International Institute for Sustainable Development. https://www.iisd.org/articles/deep-dive/canada-can-expect-declining-oil-demand

Chicago

Cosbey,, Aaron. Why Canada Needs to Plan for a Steep Decline in Global Oil Demand. International Institute for Sustainable Development, 2022. https://www.iisd.org/articles/deep-dive/canada-can-expect-declining-oil-demand.

Wikipedia

{{cite report |last1=Cosbey, |first1=Aaron |title=Why Canada Needs to Plan for a Steep Decline in Global Oil Demand |publisher=International Institute for Sustainable Development |date=16 September 2022 |url=https://www.iisd.org/articles/deep-dive/canada-can-expect-declining-oil-demand |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{cosbey2022why, author = {Cosbey,, Aaron}, title = {{Why Canada Needs to Plan for a Steep Decline in Global Oil Demand}}, institution = {International Institute for Sustainable Development}, year = {2022}, month = sep, url = {https://www.iisd.org/articles/deep-dive/canada-can-expect-declining-oil-demand}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }