Aramco IPO Prospectus Flags Peak Oil Demand Risk in 20 Years - Bloomberg

Aramco IPO Prospectus Flags Peak Oil Demand Risk in 20 Years - Bloomberg:

Global oil demand may peak within the next 20 years, according to an assessment included in the prospectus for Saudi Aramco’s initial public offering, suggesting views are slowly changing in the kingdom where officials long dismissed the notion as overblown.

Rather than providing its own assessment, Aramco used a forecast from industry consultant IHS Markit Ltd. that forecasts oil demand to peak around 2035. Under that scenario, demand growth for crude and other oil liquids will be “leveling off” at that time. In an accompanying chart, the Saudi oil giant showed global oil demand lower in 2045 than in 2040.

While Aramco didn’t explicitly endorse the forecast, its inclusion in the 658-page IPO prospectus will bring it the attention of investors worldwide. The company’s directors believe that the data provided by the industry consultant are “reliable,” according to the prospectus.

A second scenario in the prospectus, which is essentially a marketing document for Aramco’s share sale, assumes a faster transition away from fossil fuels that leads to peak oil demand occurring in the late 2020s.