BP PLC (BP.US) announced that oil demand will continue growing throughout this decade, revising its previous forecast that demand could peak as early as this year. The oil giant stated in its annual Energy Outlook report that emerging market consumption growth, slow energy efficiency improvements, geopolitical tensions, and continued petrochemical usage indicate that peak oil demand will occur no earlier than 2030. Daily consumption is projected to reach 103.4 million barrels in five years, up from 102.2 million barrels this year.

With Trump's return to the White House, the world is accelerating away from ambitious energy transition goals, and oil majors are refocusing on their core fossil fuel businesses. BP PLC in particular has faced pressure from activist investor Elliott Investment Management to prioritize oil and gas operations, and this new analysis provides support for that strategic direction.

BP PLC stated that demand growth is driven by "lackluster" energy efficiency improvements, which will be met by fossil fuels. Chief economist Spencer Dale and his team noted in the report that if this trend continues, daily oil demand growth could increase by 6 million barrels by 2035. The company's core expectation is that demand will begin declining to current levels around 2035.

BP PLC is not alone in changing its outlook on oil demand prospects. Bloomberg's Javier Blas reported earlier this month that the International Energy Agency is preparing a report this year showing oil and gas demand will continue growing beyond this decade, contrary to the agency's previous assumptions. He cited a draft IEA report indicating fossil fuel consumption will continue growing until 2050.

BP PLC expects that under the world's current development trajectory, oil demand will persist long-term after 2035, with daily consumption of approximately 83 million barrels by 2050. Last year's BP report showed daily consumption of about 75 million barrels by 2050.

Meanwhile, the London-based company believes natural gas demand will grow during this period, primarily driven by liquefied natural gas imports in Asia. The report states that the United States and Middle East will be the main gas suppliers during this period.

A new uncertainty factor is demand from artificial intelligence-related data centers. BP PLC estimates that by 2035, data center electricity consumption growth will account for approximately 10% of global electricity demand growth and 40% of U.S. electricity demand growth. The company also highlighted the uncertainty range of data center demand, as chip and cooling technologies are rapidly improving efficiency.

BP PLC itself has made substantial investments in renewable energy in recent years, but these ultimately became loss-making projects. Earlier this year, after years of poor performance, the company reset its strategy to return to oil and gas operations.

The report emphasizes that the application of biofuels, hydrogen, and carbon capture, utilization and storage technologies depends on government policies. Both BP PLC and Shell have recently canceled plans to build biofuel plants in Europe.