Many still regard electric vehicles as a “future technology,” believing that their impact on the oil market is still a distant concern. However, reality has already outpaced these predictions. By 2025, the newly added electric vehicles alone will be sufficient to cause a global decline in oil demand by approximately 0.5% annually, translating to a reduction of nearly 200 million barrels of oil each year. In a world that consumes about 38 billion barrels of oil annually, this is not a marginal change but a clear signal that demand structures are beginning to shift.
More importantly, this impact will not dissipate; it will accumulate. Electric vehicles are not a one-off policy stimulus but durable goods. A typical gasoline vehicle consumes about 10 barrels of oil each year; when it is replaced by an electric vehicle, this demand will continue to disappear over the next decade or more. The approximately 20 million electric vehicles sold globally in 2025 will not merely reduce oil consumption for that year but will lock in a trajectory of declining demand for many years to come.
This transition is crucially linked to the structure of oil usage. Land transportation currently consumes about half of the world’s oil, with private cars and light commercial vehicles accounting for the largest share and being the most easily electrified segment. Electric vehicles are not infiltrating the oil market from the periphery but are directly targeting its core, most stable sources of demand. When this half of the demand begins to loosen, the long-term balance of the entire market will be rewritten.
Official scenario analyses also corroborate this direction. The International Energy Agency’s assessments indicate that under the continuation of existing policies, the global electric vehicle fleet could avoid the consumption of approximately 1.8 billion barrels of oil annually by 2030; by 2035, this figure will rise to about 3.6 billion barrels. If the emission reduction commitments announced by various countries are fully realized, the annual reduction by 2035 could even reach over 4 billion barrels.
Putting these numbers back into the overall context makes their significance clear. Based on the global oil demand of approximately 38 billion barrels annually, road electrification alone could reduce annual demand by nearly 10% by 2035. This is no longer a fluctuation in a specific year or region but a fundamental challenge to the long-term prospects of the oil industry. The real acceleration is likely to occur after 2035, when multiple major economies have closed the policy gates. The European Union and the United Kingdom have already set timelines to ban the sale of most new gasoline and diesel cars, and the oil demand suppressed by the proliferation of electric vehicles will only further accelerate the decline.
Some may point out that aviation, shipping, and petrochemicals still heavily rely on oil, and electric vehicles cannot “eliminate” oil. While this statement is not incorrect, it overlooks a more pressing issue: the oil market does not need to be eradicated; losing its growth engine is sufficient to change everything. When the largest, most stable, and most predictable sources of demand begin to contract year by year, expectations for oil prices, investment returns, and capacity planning will inevitably need to be recalibrated.
Therefore, the real question worth asking today is no longer whether “electric vehicles will affect oil demand in the future,” but rather: when electric vehicles are already suppressing demand by hundreds of millions of barrels annually and will accelerate further after 2035, why do some still choose to pretend that none of this has happened?
