Such a rapid growth will be partially of a recovery nature. Global demand for jet fuel in 2021 increased by more than 20% (by 1 mln b/d), but it was still almost a third lower than the pre-crisis level. Economic growth will facilitate further recovery of the market. According to the IEA, global GDP between 2021-2030 will increase by 35% and contribute to the growth of freight and passenger air transportation.
LPG and naphtha
Petrochemistry will be the second in terms of the LHC growth rate because naphtha and liquefied petroleum gases (LPG) are its main feedstock. LPG consumption between 2021-2030 will increase by 2 mln b/d, and naphtha – by 0.8 mln b/d. About 70% of the demand for petrochemical raw materials comes from plastic production. Therefore, a critical driver of the industry will be continued urbanisation in Asia. Urban population growth will reduce the gap in the specific consumption of plastic between the developed and the developing countries. For example, on average, per capita use of plastic in India is 25 kg per year, while in the United States – 250 kg per year (with the urbanisation level of 35% and 83%, respectively).
At the same time, the impact of plastic recycling measures still remains very limited. In Europe, 60% of paper and 80% of steel and aluminum are recyclable but for plastic only 25%. Therefore, growth in plastic demand will be difficult to contain even in the developed countries, in particular with regard to the boom in wind turbines, for which naphtha products (such as foamed polyethylene terephthalate) are used.
Gasoline and diesel
Demand will continue to expand in land transport, though mainly in its freight segment. Diesel fuel consumption from 2021 to 2030 will increase by 1.7 mln b/d, while automotive gasoline will decrease by 0.4 mln b/d. This difference is because of higher penetration of electric transport in the passenger transportation segment. While the share of electric vehicles in global passenger car sales was 10%, the share of truck sales was only 0.3%.
Demand for diesel fuel will stabilise in the 2030s when fuel cell trucks converting chemical energy of hydrogen into electrical energy will be increasingly used. However, the role of transport still remains marginal even in the hydrogen demand structure. According to the IEA, in 2021, over 99% of the global H2 consumption came from oil refining, as well as production of methanol, ferrous metals and mineral fertilisers, while the non-industrial sector accounted for only 0.04%.
Fuel oil and biofuels
Emission reduction policies will still remain an important demand driver, with biofuel consumption between 2021 and 2030 increasing by 1.2 mln bpd. Aviation will become one of the demand segments. According to the plan of the European Commission, the share of biofuels in air transportation by 2025 should be at least 2%, and by 2030 – at least 5%. On the other hand, efforts to reduce the carbon footprint will reduce the use of fuel oil, the demand for which in 2021-2030 will decrease by 0.4 mln b/d. Both the ban on high-sulphur fuel oil in water transport, established in 2020 by the International Maritime Organization (IMO), and rejection of this raw material in the power industry will play their part. In the United States, 19 oil-fired power plants were closed in 2022, totaling 256 MW, according to the Energy Information Administration (EIA).
In general, despite changes in the demand structure, LHC consumption in the 2020s will keep growing. Energy transition, which has become a major challenge for the coal industry, has so far had less impact on the oil industry.
