Crude Oil Demand May Have Peaked by 2025 as Biofuels and Gas‑Based Fuels Rise

Demand for crude oil may have peaked in 2025, according to a report by FGE NexantECA, because rising fuel needs are being satisfied increasingly by biofuels and natural‑gas‑derived liquids. Chairman Emeritus Fereidun Fesharaki and analyst Cuneyt Kazokoglu said the world will keep using more liquids but not necessarily more crude. They noted that biofuels and hydrocarbons such as ethane from natural‑gas processing are taking a larger share of demand. The report also points to the Hormuz crisis this year, which disrupted flows through the strategic Middle‑East chokepoint and erased some oil demand. The crisis arrived roughly six years after the Covid‑19 shock, echoing the gap between the 1973 and 1979 oil shocks that permanently cut power‑generation demand. Road transport, which makes up about 45 % of global oil use, is the main arena where substitution is occurring; electric vehicles are cutting gasoline demand and are beginning to affect diesel. Between 2019 and 2025, combined demand for biofuels and natural‑gas liquids grew faster than crude. In the United States, every increase in oil demand since 2010 has come from ethane. Biofuels accounted for 10 % of oil‑demand growth over the last decade and are expected to rise as airlines and ships adopt them. The analysts warned that, like the 1970s shocks, the twin crises of the past decade create a growing challenge for refiners, upstream investors and OPEC policy. ## Context The shift toward biofuels and gas‑based fuels reflects broader moves to cut carbon emissions and diversify energy sources. Faster growth in these alternatives can lower the long‑term need for new crude production.