Market Report Sneak Peak

The 7th edition of the Future of Fuels report provides a comprehensive 20-year outlook on crude oil, refined products, biofuels, and EVs amid mounting geopolitical tensions and policy shifts. Geopolitical and domestic policy shifts over the past several months are creating the most significant uncertainty for petroleum markets since the COVID era, with the potential for material impacts across crude, refined products and biofuels. The U.S. takeover of Venezuela’s oil sector has accelerated the expected timeline for crude production growth, though refinery utilization is still not projected to improve. Instability in Iran presents growing risks to global markets, but no substantive forecast changes have been made. The Russia Ukraine war continues to disrupt trade flows and pressure Russian upstream and downstream performance, with crude production projected to decline to about 9.9 MMb/d by 2029 and only gradually recover to pre war levels by mid century. China remains the largest wildcard, as political tensions, demographic challenges and evolving policy priorities drive modest upward revisions to demand, flattening refining capacity growth and ongoing uncertainty around EV adoption and crude output.

In the U.S., the Trump administration has expanded efforts to roll back energy transition policies, leading to further reductions in long term EV adoption assumptions and trimming the projected impact on gasoline demand by roughly 300 Mb/d. The potential repeal of the EPA Endangerment Finding could have far reaching implications, though outcomes remain unclear. In biofuels, we now assume reversal of prior EPA proposals that would have reduced RIN generation for imported fuels, supporting soybean oil pricing at export parity, along with partial reallocation of small refinery exemptions and a lower RIN equivalence value for renewable diesel. While efforts to expand E15 nationwide and reform the Renewable Fuel Standard are ongoing, forecasts continue to assume limited growth in higher ethanol blends. Tariff policy remains fluid, but our base case assumes the administration ultimately avoids measures that would materially disrupt petroleum trade flows or economic growth.