Peak demand and oil's long-term trap
Fixating on the timing of a peak in oil demand is misplaced. Rather, the peak's significance is in shifting the paradigm, from perceived scarcity to perceived abundance. And it poses a problem for low-cost producers
The economic response would be to increase their output to capture value while they still could, pressing the advantage of cheaply extracted oil. But oil also carries a social cost in these countries. And the long-term oil price will therefore reflect not their marginal cost but the social one. That's the subtle argument of a new paper from the Oxford Institute for Energy Studies, written by Spencer Dale, BP's chief economist, and Bassam Fattouh, the institute's director. It's a compelling read. The notion of peak oil demand has been ubiquitous in the energy world's discourse over the past couple of years. The idea has lingered on during 2017, even as demand soared. If the oil-price rise of
Also in this section
10 March 2026
From Venezuela to Hormuz, the US—backed by the most powerful military force ever assembled—is redrawing not only oil and gas flows but also the global balance of energy power
10 March 2026
By shutting the Strait of Hormuz, Iran has cut exports of distillate-rich Middle Eastern crude, jet fuel and diesel, and is holding the energy market hostage
10 March 2026
Eni’s director for global gas and LNG portfolio, Cristian Signoretto, discusses how demand will respond to rising LNG supply, and how the company is expanding its own gas and LNG operations through disciplined, capital-efficient investments
9 March 2026
Petroleum Economist analysis sees increases in output from Saudi Arabia, Venezuela and Kazakhstan among others before region’s murky descent
