A sharp acceleration in electric vehicle sales could reduce global oil demand by as much as 320,000 barrels a day by the end of next year, according to Goldman Sachs, as energy prices retreat towards levels seen before the Iran war.
The bank said global EV penetration reached 26.1% of total passenger car sales in May, up 3.4 percentage points since February and close to a record high.
The increase has been broad-based, with 12 of the world's 15 largest EV markets recording higher adoption rates over the period.
China has led the shift, accounting for more than 60% of the increase in global EV penetration and recording an 11.4 percentage point rise since February.
Last year, one in four new cars sold worldwide was electric, according to the International Energy Agency (IEA), with the share of EVs in global new sales expected to reach 50% by 2035, even in the absence of additional policy support.
Goldman estimates that, if current trends for growing demand persist, higher EV adoption could reduce global oil demand by 0.32 million barrels a day by December 2027.
Even under a more conservative scenario where EV penetration remains at current levels, demand would still be 0.13 million barrels a day lower than otherwise expected.
Higher fuel prices linked to disruption around the Strait of Hormuz may have encouraged consumers to switch more rapidly towards electric vehicles, said Goldman oil analyst Alexandra Paulus.
This trend is likely to have been particularly strong in China, where gasoline demand has already weakened as EV charging volumes have increased.
Goldman said the trend supported its view that a more prolonged oil demand slowdown could contribute to Brent crude falling into the mid-$50s a barrel by late 2027.
