Global Oil Demand 'clings By A Thread' And Even Ai Might Not Do Much To Boost Crude

ANDREWS, TX - JANUARY 20: An oil pumpjack works at dawn in the Permian Basin oil field on January 20, 2016 in the oil town of Andrews, Texas. Despite recent drops in the price of oil, many residents of Andrews, and similar towns across the Permian, are trying to take the long view and stay optimistic. The Dow Jones industrial average plunged 540 points on Wednesday after crude oil plummeted another 7% and crashed below $27 a barrel

Spencer Platt/Getty

• Global oil demand is slowing and will peak by 2030, Bank of America estimates.
• Even the rollout of power-intensive AI infrastructure won't change this.
• Appetite for crude will slow as global GDP declines and the green transition continues.

With the world's energy appetite set to tumble through 2030, Bank of America estimates that oil demand is nearing its peak, and even the massive rollout of power-hungry AI infrastructure won't stop the trend.

"Crude demand clings by a thread," the bank wrote in a Tuesday note. "Even with all the hype around Artificial Intelligence and data centers, we believe global energy consumption should grow below 3% YoY into 2030. In turn, oil use may struggle to grow above 1% annually."

According to the research, global GDP growth has suffered a material decline since the 2000s, falling from an average 6.5% to 4.9% this decade. For the next few years, structural headwinds in China and Europe will keep global GDP growth stuck 3%-3.5%.

When economic growth slows, it's natural to see a reduction in global energy demand as well, BofA said. The bank expects crude demand growth to fall off considerably by 2030, dropping from an increase of 1.1 million barrels per day in 2025 to 400,000 at the turn of the decade.

The growth story might look different in the US, with the economy expected to remain robust, and amid a rush toward energy-intensive AI centers that are expected to push regional power-demand growth to a two-decade high.

But that doesn't necessarily mean oil demand will see a resurgence. Instead, renewable energy is increasingly set to deliver a greater share of power in the country, with solar estimated to become the fastest-growing energy source this year.

Internationally, the embrace of green energy will continue to be a serious factor behind declining oil consumption, BofA said. Even if the Trump administration successfully curbs policies related to electric vehicles or wind energy, renewable momentum is strong worldwide.

"Energy transition spending is still running at a strong clip," the bank wrote. "Even Saudi Arabia is now moving quickly into wind and solar power and is set to drastically reduce crude and fuel oil consumption in its electricity sector. Demand for other fuels is limited too."

BofA is not the first organization to call a peak in global oil demand. Such forecasts are central to a debate between the Organization of Petroleum Exporting Countries and the International Energy Agency.

The IEA expects crude demand to peak ahead of 2030.