The largest share of oil demand - at more than 50% - continues to be transportation, including road transport, aviation, and freight. However, several developments are continuing to reshape the transportation dynamic even during this time of crisis.
As the COVID-19 pandemic unfolds, governments are continuing the momentum towards smart transitions that encompass both regulatory and technology approaches. This involves implementation of mandated fuel economy improvements for road transport and shipping as well as providing policy support for electric vehicles (EVs) in efforts to encourage greater uptake of clean transportation options.
The popularity of shared mobility services will impact vehicle ownership trends and potentially change mobility dynamics. Improved batteries and electric storage options, modernization of the electric grid to accommodate EVs, and the potential of hydrogen as a transport fuel will further enhance smart transitions.
However, even as these developments advance, EVs still require greater penetration to compete with approximately 1 billion internal combustion vehicles globally. Additionally, aviation and freight transportation will continue to depend on oil for the foreseeable future or until technology can have a meaningful impact.
As a neutral platform dedicated to global energy dialogue, the IEF stands ready to facilitate conversations regarding policies, technologies, and trends that will determine the future of transportation energy use.