Wicked tricksy oil demand

Once upon a time, in a world much simpler than the one we live in now, oil demand was quite easy to predict. Well, when I say easy, I mean there were fewer assumptions to base your predictions on, such as economic growth, for example. In that world of yore, economic growth was generally a good thing, a thing to strive for, a thing that politicians campaigning for office invariably included in their promises as the ultimate goal.

In that world of yore, oil demand growth was a function of economic growth and, bar some huge unforeseen event such as a declared pandemic, demand was going to go up as long as economies grew. In that world, the biggest worry was running out of oil before we’d found alternatives.

But then a new world was hatched from the egg of wealth-induced complacency in the West that tried to spread far and wide. It was a world where growth was no longer a positive. In fact, the leaders of this new world told everyone willing to listen, and even those who couldn’t care less, growth was a bad thing because it consumed resources and resources were not there to be consumed but rather conserved — unless, of course, they were being consumed to produce solar panels, wind turbines, and electric cars.

We could all live with less, the leaders of the new world told us, and it would make us happier and more fulfilled. No one needed to have electricity at all times, some of the more radical voices in the new world said. No one needed to eat meat on a frequent and regular basis. Dairy, too.

We could meet all our energy needs with wind and solar (and some green hydrogen and nuclear), and most of our dietary needs with cereals, vegetables and fruit, we were told, with some additional protein from insects. But we’d have to adjust these needs. Downwards.

Abundance was over, as one notable leader of the new world said a while ago with uncharacteristic honesty. Scarcity, as in, deliberate scarcity, was the way forward — especially in energy matters. And that was a good thing because abundance came from oil, from coal, and from gas, and those were all very bad things because their combustion, among other things, produces the same chemical compound we produce upon expelling air from our lungs.

We all needed to produce less of that compound, the leaders told us, so we ultimately needed to consume less energy. Alas, things have not gone according to the leaders’ plans, and that’s putting it mildly. If I wasn’t putting it mildly, I’d say those plans went utterly, completely, and entirely wrong. Which is a good thing and nowhere is it more visible than in oil demand trends and forecasts — and the chaos they have produced.