Last month, the International Energy Agency (IEA) published it’s annual Global Energy Outlookin which it predicts that global demand for all fossil fuels will stop growing in the current decade, while renewable energy will account for almost half of global electricity generation by 2030. According to the organization Paris-based energy watchdog, global oil demand is expected to fall from the current level of 103 million barrels per day to ~85 million barrels per day in 2030 for the world to be on track to achieve its goal of net zero emissions by 2050. This equates to a rate of decline of three to three. four million barrels per day per year until the end of the decade.

The IEA’s very pessimistic forecasts for the oil industry mirror those of Bloomberg. Last April, Bloomberg predicted that global road fuel demand would continue to grow for just four years, peaking in 2027 at 49 million barrels per day before entering a final decline. According to Bloomberg, electric vehicles, ever-improving fuel efficiency and shared mobility are the oil sector’s main enemies, with electric vehicles expected to replace oil demand by 20 million barrels per day by 2040, up from 2 million barrels per day currently. Bloomberg estimates that demand for gasoline and diesel for road transportation has already peaked in the United States and Europe, while in China it is expected to peak in 2024. Demand in other major consuming countries like India will experience a precipitous fall in the 2030s.

However, another well-known analyst pointed out that these bearish scenarios are very unlikely to materialize. Speaking in an interview On CBC’s “The Eyeopener,” Al Salazar of Enverus Intelligence Research noted that 85 million barrels per day, six million barrels below demand levels recorded during COVID-19, when global oil demand fell to around 91 Mb/d in 2020. and caused oil prices to fall into negative territory for the first time in history. As Al Salazar noted, the electric vehicle revolution is beginning to face serious obstacles, with China’s renewable energy and electric vehicle sector facing a tariff storm.

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Biden’s administration has been almost as tough on China as Trump’s first term, although with far less fanfare. Two months ago, the Office of the United States Trade Representative (USTR) finalized its rate increase plan on a large number of Chinese products, largely adopting the increases first proposed in May. The expanded tariffs primarily target strategic product categories, including electric vehicles, batteries, solar cells, semiconductors and critical minerals. The final pricing structure covers thousands of items across 14 product categories, with the first rate increases to take effect on September 27 and the remainder over the next two years. And they are just as punitive as those of the Trump era: Chinese electric vehicles were hit with a hefty 100% tariff; a 25% tariff on lithium-ion EV batteries and a 50% tariff on photovoltaic solar cells. Meanwhile, a 50% tariff on semiconductors made in China will come into effect in 2025.

But the United States is hardly an exception in this area. The 27-member European Union is currently considering whether or not to impose tariffs on imports of Chinese electric vehicles. A year ago, EU President Ursula von der Leyen launched the anti-subsidy investigationand it ended with recommend tasks between 8% and 35% on Chinese electric vehicles. A informal vote The July 15 holding saw a group of countries representing 62.5 percent of the bloc’s population in favor of the tariffs, meaning the final vote will likely see the tariffs approved. While these tasks could save time for people like Volkswagen (OTCPK: VWAGY) or Stellantis (NYSE: STLA) to adapt, they are likely to spark another major trade war with Beijing already threatening to impose tariffs on a range of European products, including high-end automobiles, brandy, pork and dairy products.

Trump proposed a 10 to 20 percent customs duties on all importsand a 60 percent tariff on all imports from China. While he has sought to undo some policies enacted under Democratic presidents, including Obamacare, it is likely he will accept the already punitive tariffs imposed by the Biden administration, especially since they will help President Elon Musk . Tesla Inc. (NASDAQ:TSLA). In fact, that seems to be the view of the stock markets, with TSLA surging more than 20% since November 6th. According to Wedbush Securities analyst Dan Ives, Trump’s victory in the White House will be a game-changer for the story of autonomy and AI for the stock markets. Tesla and Musk in the years to come.

“We estimate that AI and autonomous opportunities alone are worth $1 trillion to Tesla, and we hope that under the Trump White House, these key initiatives will now be accelerated like the federal regulatory spiderweb that Musk & Co. has encountered over the past few years. The FSD/autonomist is fading considerably under the new Trump era.” Ives emphasized.

By Alex Kimani for Oilprice.com

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