No. of Recommendations: 3
BP's oil demand outlook is about 25% lower than XOM's outlook. I asked Perplexity why.
ExxonMobil and BP have significantly different outlooks on future oil demand, reflecting divergent views on the pace of the energy transition:
ExxonMobil's Outlook
ExxonMobil projects that global oil demand will remain strong through 2050:
Oil demand is expected to stay above 100 million barrels per day in 2050, similar to current levels.
This forecast is about 25% higher than BP's estimate for 2050 oil demand.
ExxonMobil predicts a 15% increase in total global energy use between now and 2050.
The company believes:
Oil and natural gas will remain essential parts of the global energy mix, meeting over 50% of energy demand in 2050.
Even if every new car sold globally in 2035 was electric, oil demand in 2050 would still be 80 million barrels per day.
BP's Outlook
BP has a more conservative view on future oil demand:
BP's forecast for 2050 oil demand is approximately 25% lower than ExxonMobil's projection.
The company expects a faster decline in oil demand and quicker emissions reductions.
Key Differences
Pace of Energy Transition: ExxonMobil foresees a slower transition away from fossil fuels, while BP anticipates a more rapid shift towards renewable energy sources.
Peak Emissions: ExxonMobil predicts global greenhouse gas emissions will begin to decline in 2030. BP expects emissions reductions to occur sooner, in the middle of the current decade.
Investment Strategy:
ExxonMobil is focusing more on decarbonizing its existing products rather than heavily investing in renewables.
BP has been allocating 8-12% of its annual capital expenditure to renewables since 2021, primarily in offshore wind and EV charging infrastructure.
Approach to Energy Transition:
ExxonMobil is maintaining a stronger focus on its core oil and gas business while investing in decarbonization technologies.
BP has been more aggressive in diversifying into renewable energy and associated cleantech.
These differing outlooks have led to distinct strategies in how each company is approaching the energy transition and future investments.
My guess is they are both talking teir book.
Aussi
