Vitol Extends 'Peak Oil' Horizon Amid Slow EV Uptake

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Written by Daniel Graeber for IIR Energy Intelligence (Sugar Land, Texas)

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Summary

The share of electric vehicles is on the decline, particularly in the U.S. market. That means crude oil has a longer shelf life than expected, Vitol says.

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The Internal Combustion Engine Lives On

Commodity trader Vitol said in a long-term market outlook published Monday that oil demand is expected to stay strong due in part to the moderation in the electric vehicle (EV) sector, though alternative vehicles are still gaining traction globally.

Vitol said that road transportation is the primary factor determining the trajectory for global oil demand. The uptake in EVs, however, is slowing down in the U.S. economy, the largest in the world.

In the U.S. vehicle market, the Energy Information Administration (EIA), part of the U.S. Department of Energy, said EV sales surged during the first half of 2025, but then dropped off dramatically in September due to the expiration of tax credits.

"Battery EV sales then fell to less than 6% of the market in each of the remaining months of 2025," the EIA said Monday. "Last year marked the first year where annual sales and market share of battery electric vehicles declined."

Looking at subsequent gasoline demand, Vitol said it nevertheless expected to see demand plateau sometime around 2035. But the U.S. market will remain the largest gasoline consumer globally, with demand expected to drop by only about 800,000 barrels per day (BBL/d) over the coming years.

China, for its part, dominates the market, with about 50% of domestic sales tied to EVs. Chinese exports of cheaper, excess supplies, meanwhile, means markets such as those in Southeast Asia are adopting EVs quicker than expected.

For Europe, gasoline demand increases through the early 2030s before moving toward a gradual decline in 2040.

"Despite having the most stringent EV adoption targets, European gasoline demand will continue to benefit from the ongoing shift from diesel to gasoline engines in the passenger car fleet," Vitol's report read.

By the Numbers

• $4.7 billion spent on U.S. ICE's in 2024
• $6.9 billion spent last year
• 2025 the first year that U.S. EV sales decline

End of Tax Credits Saw U.S. Consumers Stick with Internal Combustion Engines

In the U.S. market, the end of incentives is having a dramatic impact on the vehicle sector. In December, Michigan-based Ford Motor Company booked a $19.5 billion asset impairment charge, most of which was tied to reversing or abandoning its prior pursuit of EVs.

Ford nevertheless is behind a $2.5 billion facility in Michigan for lithium-ion batteries. Subscribers to Industrial Info's Global Market Intelligence (GMI) Industrial Manufacturing Project Database can learn more about the facility--including capacities, investment values and necessary equipment--in a detailed project report.

According to Industrial Info, U.S.-based automakers have so far cancelled or paused at least four projects tied to the EV sector, with a combined $27 billion in investment value. In 2024, before Donald Trump returned to the White House, about $4.7 billion was spent in the U.S. and Canada on vehicles with an internal combustion engine (ICE). That figured jumped to $6.9 billion last year, the first year of Trump's second, non-consecutive term in office.

Nevertheless, Vitol said the pace of global gasoline demand growth is expected to reach its peak sometime in the early 2030s as electrification advances and efficiencies improve. By the mid-2040s, global gasoline demand is expected to be about 1.8 million BBL/d lower than current levels.

"Oil fuels for road transport--principally gasoline and diesel--dominate demand at 46% of the global barrel and the outlook for these fuels underpins the overall forecast," its report read. "The adoption of EVs--primarily passenger cars--represents the main decarbonization solution at tailpipe and available at a scale that could moderate oil demand."

Key Takeaways

• Oil sticking around, Vitol says
• EV take up has slowed down, largely in the U.S. market
• U.S. tax incentives were abandoned last year

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About IIR News Intelligence
IIR News Intelligence is a trusted source of news for the industrial process and energy markets, powered by Industrial Info Resources' Global Market Intelligence (GMI).

About Industrial Info Resources
Industrial Info Resources (IIR News Intelligence) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 250,000 current and future projects worth $30.2 trillion (USD).