Goldman Sachs Sees Faster EV Adoption Pressuring Oil Demand by 2027

Goldman Sachs says a structural shift is taking hold in global energy markets, with electric vehicle adoption accelerating faster than expected and beginning to weigh on oil demand. The bank now estimates global oil demand could fall by about 320,000 barrels a day by the end of 2027, driven mainly by EV penetration in China.

The data show the trend has picked up sharply in recent months. Electric vehicles accounted for about 26.1% of global car sales in May, up 3.4 percentage points since February. Adoption rose in 12 of the world’s 15 largest markets, and China led the increase, contributing more than 60% of global growth. In China, EV penetration jumped by 11.4 percentage points in a short period, alongside lower gasoline demand and a steep rise in electricity use for charging.

Goldman says higher fuel prices, triggered by prolonged disruption to tanker traffic in the Strait of Hormuz, helped speed up the shift to electric cars. The bank says the Hormuz crisis temporarily cut oil demand by 4 to 5 million barrels a day in April, showing how sensitive the energy market is to geopolitical shocks. Although about 90% of that demand is expected to recover once flows resume, analysts warn that part of the damage may become permanent because of faster adoption of alternative technologies.

The bank also points to growing supply from the United States, Brazil, Guyana and the United Arab Emirates, as well as weakness in Chinese demand, as additional pressures on the market. Goldman cut its 2027 Brent forecast to $75 a barrel and says prices could fall into the mid-$50s in a prolonged demand slowdown. The International Energy Agency also sees EVs reaching about 50% of global car sales by 2035 even without new government incentives, reinforcing expectations of long-term pressure on oil demand.