Crude oil (aka petroleum) is super useful. So useful that humans consume more than 100 million barrels of the stuff every day. One barrel of crude oil is 159 litres. That is a lot of oil.
Refined petroleum products, or distillates, are used as fuels for transportation and fuel oils for heating and electricity generation. Crude oil derivatives can also be used to produce asphalt and feedstocks for making the chemicals, plastics, and synthetic materials that are in nearly everything we use. By some counts, there are more than 6000 products made with oil.
The exploitation of fossil fuels is a marvel of engineering and science oil. Modern societies are highly dependent on oil, and naturally, it plays a vital role in the global economy. In the chart above, we can see that as the economy goes, so does the use of oil. During the Global Financial Crisis (ca. 2008) and again during the COVID-19 Pandemic (ca. 2020) economic activity fell, and so did petroleum consumption. Now, however, we are back to pre-pandemic consumption levels. And note that this is with much of the world’s aviation industry still grounded.
Without a revolutionary invention or draconian enforcement of consumption curbs, oil demand will rise, not fall, over the next decade. The IEA projects global oil consumption to reach 104Mn barrels per day by 2026. At Acorn, our view is that this estimate is far too conservative, and it does not change the short-term reality for crude oil – demand is here to stay.
