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

This policy brief by the International Institute for Sustainable Development (IISD) argues that global oil demand is poised for a steep decline by 2030, driven primarily by the electrification of road transport and intensifying climate policies. The document analyzes scenarios from the International Energy Agency (IEA) and the Canada Energy Regulator (CER) to suggest that Canada, as a major oil exporter, must plan for a shrinking global market.

• Global oil demand is projected to decline by 2030, with the most significant driver being road transport, which accounts for 44% of crude oil demand. The transition is led by the electrification of passenger vehicles, supported by government mandates for 100% EV sales by 2035 in markets covering 25% of the global total.
• The International Energy Agency's (IEA) Net-Zero (NZE) scenario, which aligns with limiting global warming to 1.5°C, predicts oil demand will fall to 70 mbpd by 2030 and decrease by 2.4 mbpd (5.3%) annually until 2050.
• Analysis of the Canada Energy Regulator's (CER) Evolving Policies Scenario indicates that Canadian crude oil production is expected to peak in 2032, after which it will decline at an average annual rate of 1.1% to return to roughly 2018 levels by 2050.
• Demand for oil in buildings and power generation, which together make up 13% of global demand, is expected to fall by 2030 even under conservative scenarios. In the Announced Policies scenario, these sectors would see a combined drop of 2.7 mbpd by 2030.
• While petrochemicals represent 19% of global oil demand, potential demand destruction in this sector depends on policies to reduce plastic pollution. A global ban on single-use plastics could reduce petrochemical-related oil demand by more than 25%.
• Aviation and shipping account for 12% of final global oil demand. While significant displacement is unlikely before 2030, policies such as the EU's ReFuel EU and the UK's Jet Zero Consultation are driving the uptake of sustainable aviation fuels.

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} }