The End Is Not Near (for Oil…or Gas)

This week's video continues our now month-long series of analyzing the significant long-term growth potential we see for crude oil, which is in sharp contrast to consensus fears that "peak oil demand" is imminent (i.e., within the next 5 years). Frankly, the numbers in the developing world are overwhelming in terms of overall energy needs. We will need all forms of energy, both traditional sources, and, hopefully, new technologies as well.

To apply some numbers to the issue, the lucky one billion of us that live in the USA, Canada, Western Europe, Japan, Australia, or New Zealand used 41 million b/d of crude oil in 2022, or about 13 barrels per person per year. In contrast, the other 7 billion people in the Rest of the World used 59 mn b/d, or just 3 barrels per person per year. Even as attempts are made to reduce rich-country oil demand, the upside potential in the developing world we believe is magnitudes greater. We point to an equivalent 10 barrel per person per year consumption level as what is possible for the developing world over the coming decades. We will need a whole bunch of new technologies to help meet the implied energy demand growth required for the Rest of the World to reach rich country standards of living without actually growing to 10 barrels of oil consumption per capita. But the idea that crude oil will not play a role and would globally decline is pure fantasy. Looking at the numbers, it's not a close call.

In the video, we discuss the pushback we have received, which has been pretty underwhelming to be honest. As a reminder, we approach energy markets as analysts, not advocates for any particular fuel source. Our only ideology is that we are pro-capitalism, anti-socialism. It's not about liking or disliking our viewpoint. It is about what the numbers show. And the numbers are overwhelming in terms of continued crude oil demand growth for the foreseeable future.

The end, for crude oil (and natural gas) is not near.