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Study: Big Oil to Lose Auto Market Dominance in Less Than 25 Years

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Oil Pump

Image: Paul Lowry

We have heard reports from various sources intoning the impending end of the dominance of oil thanks to electric and hydrogen fuel-cell vehicles. For a while, I reacted to these studies in much the same way as if someone predicted how a particular sports team (say, the Bengals) will do this season—I see what you are saying, but the ending doesn’t really seem definite, yet.

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However, thanks to legislative changes in Europe and China pushing electric vehicle adoption and even eventually banning the sales of internal combustion engines, I think I can get a lot more firmly into the “oil is on the way down” bandwagon.

With that in mind, a new report from IHS Markit is portraying a mixed future for the oil industry as a whole over the next 25 years, as electrified vehicles expand in the market and more people switch to so-called “mobility solutions” (aka ridesharing services).

On the other hand, though, IHS Markit actually predicts that this future isn’t one without fuel-burning engines—in fact, it said that the majority would likely still have one in some form of hybrid powertrain.

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The study does come with a light of hope for oil producers, though—although it predicts a shift in the kind of vehicles bought, it also predicts that miles driven will rise, and so will total oil demand, up from 98 million barrels per day to 115 million barrels per day. So, really, what the oil industry is predicted to lose, here, is only its tight grip on the global vehicle market.

News Sources: Green Car Reports, IHS Markit