Notwithstanding the occasional speed bumps, the transition from fossil fuels to renewable energy is undeniably underway. While not retreating, demand for Crude Oil and Refined products fails to make significant advances. The EIA saw global U.S. consumption reach 20.63 mbpd in 2024, a mere 0.4% gain on the pre-pandemic 20.54 mbpd registered in 2019. This insinuates that renewable energy permeates the energy mix. Consequently, oil consumption is static and the composition of the oil basket, as the chart above reveals, is also adapting to new realities.

The most perceptible of these changes is the dwindling relevance of gasoline. The U.S. has always been the biggest consumer of the motor fuel but its weight against distillates and jet fuel is getting smaller. In 2017, two years after the Paris Climate Accord, it made up 47% of total domestic demand, compared to 20% distillates and 8% jet fuel. Its role in the mix has been downgraded and in 2025, the EIA estimates gasoline will have 43% of the U.S. oil demand market. Distillates will edge a tad lower (19%) with jet fuel remaining resilient at 8%.

The absolute figures are equally telling. Gasoline demand, which stood at 9.33 mbpd in 2017, will decline to 8.89 mbpd next year, a drop of 5%. At the same time, distillate consumption will remain resilient around 4 mbpd with jet demand expanding from 1.68 mbpd to 1.75 mbpd between 2017 and 2025.

It is becoming blatantly obvious that U.S. gasoline demand has peaked. Decisive factors are post-Covid-19 rise in remote work, early retirements and most importantly the growing adoption of electric vehicles (EV). In 2023, EV sales totalled 1.40 million, an annual increase of 40% (IEA). It is forecast to rise to 2.32 million in 2029 and by 2035 45% of total car sales in the enormous U.S. market is predicted to be EVs. The path up there will be paved with obstacles, such as the currently limited accessibility of charging stations, comparatively high cost, range anxiety and occasional supply change issues. Yet the narrow premium of 3.5 cents/gallon Heating Oil commanded over the RBOB contract in 2017 is unlikely to be repeated as sinking demand for this motor fuel will keep its price under relative pressure.