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Vitol eyes renewable investments as peak oil demand looms by 2035

Vitol, the world’s largest independent oil trader, said Tuesday it is looking to place further bets on low-carbon, renewable energy, but said it still expects global oil demand to continue to grow until the mid-2030s.

Reporting its 2018 revenues and trading volumes, the privately-held trader said it is considering how its “skillsets can best be deployed” in developing and trading alternative sources of energy to fossil fuels.

“However, at present, we do not see how this can be achieved across all sectors in the near to mid-term, without halting economic development in large parts of the world,” Vitol CEO Russell Hardy said in a statement.

“We anticipate that oil demand will continue to grow for the next 15 years, even with a marked increase in the sales of electric vehicles, but that demand growth will begin to be impacted thereafter.”

Vitol’s call on the timing of peak oil demand is in line with that of oil major BP, which last month said it expects global oil demand to “plateau” by 2035.

BP sees more of the world’s energy needs being met by booming renewable fuels and expects the economic growth of resource-hungry China to level out in the coming years. New expected curbs on some plastics and the rise of electric vehicles in the transport sector will also eat away at the role of oil in the global energy mix, according to BP’s latest long-term energy outlook.

RISING CRUDE TRADE

Vitol is currently part of a venture with Low Carbon’s VLC Energy, which recently completed the construction of the UK’s largest battery-park portfolio. The oil trader also plans to invest in renewable energy assets across Europe with Low Carbon, with a focus on large-scale wind generation.

During 2018, Vitol said its crude and product trading volumes rose by 2.3% to 7.4 million b/d. Crude trading continued to represent the largest part of Vitol’s business, with volumes rising to 3.8 million b/d, up from 3.5 million b/d in 2017 and an increase of 1.5 million b/d over the last five years. Vitol said it its product volumes were mixed last year, with a 30% increase in gasoline volumes to 44 million mt, largely offset by “some decline” in fuel oil and naphtha volumes.

Without giving comparative figures, it said traded volumes in its LNG business grew to 7.8 million mt in 2018.
Source: Platts

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