Has the global energy transition been effective? Evidence from oil consumption

Reducing dependence on oil lies at the core of the global energy transition. Amid great power competition and geopolitical tensions, the ambition to advance the energy transition is encountering unprecedented challenges. However, the effectiveness of global energy transition efforts in reducing oil consumption remains unclear. Here, we evaluated the progress from two perspectives: spatiotemporal patterns and driving factors. We found that the energy transition indeed had positive effect on reducing global oil consumption. Specifically, Europe and the United States (US) experienced structural declines in oil consumption, resulting in a shift in oil demand toward developing regions. Moreover, the transition facilitated decoupling from economic development and population growth, promoted structural adjustments in the energy mix, and improved energy efficiency, although regional differences still exist. Finally, this study offers recommendations to support more effective, targeted policy strategies.

It is widely accepted that reducing oil consumption is one of the key pathways for advancing the global energy transition and addressing climate change (Achakulwisut et al., 2023). This is because oil, as one of the most widely used fossil fuels, has significantly increased greenhouse gas emissions through its consumption. Specifically, in 2023, global oil consumption was responsible for 11.3 Gt of CO 2 emissions, accounting for 30% of total carbon emissions from the energy sector (IEA, 2024a), second only to coal. Therefore, achieving a sustained reduction in oil usage worldwide has become one of indispensable task within the broader global energy transition agenda.

The global energy transition is currently experiencing a crisis of confidence. On the one hand, researchers have been growingly skeptical about the feasibility of achieving the 1.5 °C target when assessing global climate actions and policies (Bertram et al., 2024; Fransen et al., 2023; Lamb et al., 2024; Li et al., 2024; Schleussner et al., 2024). On the other hand, escalating regional conflicts and intensifying great power competition are undermining global climate cooperation and hindering the progress of international climate actions. This potential risk has been concretely exposed in a series of realistic events in recent years. Forced by automotive manufacturers, the United Kingdom (UK) and the European Union (EU) have started to reconsider, even potentially abandon, their 2035 targets of banning the sale of new gasoline-powered cars (Abnett, 2023; Nature Editorial, 2023; Reuters, 2023). In the US, President Trump has immediately issued an executive order to exit the Paris Agreement upon reassuming office. In the meanwhile, the national energy policy was toward prioritizing fossil fuel production and profit generation (Reuters, 2025a,b). In response, several major banks announced their withdrawal from global climate alliances, aiming to gradually lift financing restrictions on fossil fuel industries within the banking sector (Jessop, 2025; Jessop and Wilkes, 2025; Kerber, 2025; Rickman et al., 2024; Srivastava and Kaye, 2025). This fact not only weakens national ambition in advancing the energy transition, but also further undermines global policy goals for achieving climate targets. Under current situation, a precise assessment of the actual progress of the energy transition in reducing oil consumption is of critical importance for clarifying policy pathways and restoring momentum to climate action.

In recent years, a growing body of studies has evaluated the progress of the energy transition from various perspectives, including renewable energy deployment, power sector decarbonization, carbon intensity reduction, green investment efficiency, and transportation electrification (Chen et al., 2022; Fang et al., 2025; Nieto et al., 2024; Peng et al., 2024; Wei et al., 2025; Yuan et al., 2021). However, most of these studies have largely focused on technological pathways and emission outcomes, a systematic investigation on whether the energy transition has altered the consumption patterns of traditional fossil fuels, particularly the spatial dynamics and driving mechanisms of oil consumption, is lacking.

To examine oil consumption dynamics in the context of energy transition, this study develops an integrated analytical framework combining the center of gravity method, Shapley decomposition, and Logarithmic Mean Divisia Index (LMDI) decomposition. Specifically, the center of gravity method is used to trace the spatial evolution of global oil consumption, Shapley decomposition identifies the contributions of regions and countries to such shifts, and LMDI decomposition reveals the roles of economic development, population growth, energy intensity, and energy structure in driving these changes. Together, these methods allow the analysis to proceed from overall spatial evolution, to regional contributions, and finally to the underlying driving mechanisms.

In this study, we make the following key contributions: (1) we offer a more comprehensive perspective on the energy transition by examining the spatial structure and driving factors of oil consumption. (2) we propose an integrated analytical framework that combines spatial structure analysis with driving force decomposition, offering a transferable pathway for assessing the structural evolution of energy consumption. (3) we identify and quantify the progress in reducing oil consumption through energy transition efforts, providing empirical evidence to inform more targeted decarbonization policies and differentiated transition pathways, thereby supporting renewed momentum in the energy transition.

The remainder of this paper is structured as follows: Section 2 presents the research methods and data sources, Section 3 reports the results and discusses, and Section 4 concludes the study and provides policy recommendations.

This study combines three complementary methods to analyze global oil consumption from spatial, regional, and structural perspectives. Specifically, the center of gravity method traces spatial shifts, Shapley decomposition identifies regional contributions to such shifts, and LMDI decomposition reveals the main driving factors behind the observed changes. Together, these methods form a progressive analytical framework moving from overall spatial patterns to regional attribution and then to underlying driving mechanisms.

Center of gravity method

We employed the center of gravity method to investigate the spatial shift of the global oil consumption gravity center from 2008 to 2023. As a widely used tool for spatial analysis, it is suitable for capturing changes in the geographical distribution of oil consumption over time (Li et al., 2023; Liang et al., 2021). The calculation formulas for the global oil consumption gravity center in year t are presented in Equations (1) and (2)

where (x i, y i) denotes the geographical coordinates of country i, with x i and y i representing its latitude and longitude, respectively; C i t represents the oil consumption of country i in year t; n is the total number of countries included in this study; X t and Y t denote the latitude and longitude of the gravity center in year t, respectively.

To further ensure the robustness of the center of gravity results at the global spatial scale, this study employs a spherical version of the center of gravity method as a supplementary robustness check. This test examines whether the spatial movement identified by the conventional planar approach is sensitive to the treatment of the Earth's curvature. The calculation procedure for this robustness check is provided in the Supplementary material.

Shapley decomposition method

We employed the Shapley decomposition method to evaluate the regional contributions to the changes in the global oil consumption center of gravity. Due to its high accuracy (Li and Han, 2023) and its ability to capture both direct and indirect effects among variables (Ye, 2012), the Shapley decomposition method is widely used and well suited to quantifying the marginal contribution of each region to the overall shift. Here, the whole world is divided into n regions, and the set of all regions is denoted as N = {1, 2, ⋯, n }. Different coalitions formed by various combinations of these regions are represented by S, where S is a subset of N. The marginal contribution of a region k to the changes in the global oil consumption gravity center is defined by the following equations:

where Δ X and Δ Y represent the changes in the latitude and longitude of gravity center, respectively; MCk, X and MCk, Y denote the marginal contributions of region k to the changes in the latitude and longitude of gravity center, respectively; and Δ X (S \{ k })and Δ Y (S \{ k }) denote the changes in the latitude and longitude of the gravity center, respectively, after excluding region k from the set S.

When region k participates in coalition S, possible permutations of the regions within the coalition will be (| S |−1)!, where | S | denotes the number of regions included in coalition S. The remaining (n −| S |) regions can be arranged in (n −| S |)! different ways. The contribution weight W that region k should receive within the overall coalition is expressed as follows:

The Shapley value contribution of region k to changes in the global oil consumption gravity center (SVXk: latitude and SVYk: longitude) is given by:

LMDI decomposition method

LMDI decomposition was employed to identify the driving factors of oil consumption changes at the global, regional, and national levels. Following previous studies, this study considers energy structure, energy intensity, economic development, and population growth as the main drivers of oil consumption dynamics, as they reflect structural change, efficiency improvement, economic scale, and demographic expansion, respectively (Zheng et al., 2022; Andreoni, 2022; Tang et al., 2024; Hasan and Liu, 2022). As a consequence, this study constructed a two-tier LMDI model based on these four indicators to identify the driving factors of oil consumption changes at the global, seven regional, and representative national levels. Oil consumption C is calculated as follows:

where E refers to primary energy consumption; GDP indicates gross domestic product. The definitions of the remaining variables in Equation (8) are provided in Table 1.

The change in oil consumption from year t to year t +1 is determined as follows:

The calculation methods for each factor are as follows:

where Δ C denotes the change in oil consumption between year t +1 and year t; Δ C OCS represents the change in the share of oil consumption; Δ C EI corresponds to the change in energy intensity; Δ C GC indicates the change in per capita GDP; and Δ C PP refers to the change in population size.

Data

In this study, we collect data from 78 major oil-consuming countries and regions covering the period 2008–2023 to represent global oil consumption. Based on the Statistical Review of World Energy (Energy Institute, 2024), these countries and regions are grouped into seven regions, as shown in Table A1.

Oil consumption and primary energy consumption data are obtained from the Energy Institute Statistical Review of World Energy 2024 (Energy Institute, 2024). The geographic coordinates of capital cities are sourced from TechSlides country-capitals dataset (Techslides, n.d.). GDP and population data are collected from the World Bank (World Bank, n.d.a., (n.d.b).). Specifically, GDP is expressed in real terms and measured in constant 2015 US$.

Evolution of the global oil consumption gravity center and regional contributions

To better capture the influence of the global energy transition on the reduction of oil consumption, we divide the period investigated (year 2008 to 2023) into four equal intervals, with choosing 2016 as a key turning point in the process. For analytical purposes, regions whose contributions align with the direction of the movement of the gravity center are defined as driving regions, while those contributing in the opposite direction are considered restraining regions. In addition, given the relatively limited north–south movement of the global oil consumption center, the following analysis mainly focuses on its east–west changes. The spherical center of gravity method is further used as a robustness check to test the sensitivity of the center of gravity results to the treatment of the Earth's curvature, with details provided in the Supplementary material.

From 2008 to 2023, the global oil consumption center generally shifted eastward before exhibiting a temporary westward adjustment after 2020 (Figure 1), reflecting successive changes in the spatial distribution of global oil consumption. During each phase, the dominant regions that drive the gravity center move varied considerably (Figure 2). Between 2008 and 2011, the center of gravity shift from 18.44°E, 33.36°N in 2008 to 22.53°E, 32.53°N in 2011. During this period, the Asia Pacific and North America regions were the main contributors to this eastward shift (Figure 2). This pattern reflects rapidly rising oil demand in developing Asian countries, alongside declining oil consumption in parts of North America (Table 2). During this early phase, global energy transition efforts remained limited, developing countries in the Asia Pacific became the primary drivers for the increase of oil consumption.

Between 2012 and 2015, the gravity center continued its eastward trajectory with a relatively slow movement, compared to the previous stage, shifting from 24.45°E, 32.29°N in 2012 to 25.20°E, 32.23°N in 2015. Notably, a significant inflection occurred in 2014, followed by a directional reversal in 2015 (Figure 1). This turning point was likely influenced by the sharp decline in international oil prices in the second half of 2014, as lower oil prices tend to stimulate oil consumption (Oltulular, 2024). Although the price drop occurred in 2014, its impact on consumption patterns became more pronounced in 2015, resulting in a rapid adjustment in regional consumption structures and ultimately reversing the direction of the gravity center's shift. This suggests an emerging adjustment in the spatial distribution of global oil consumption, with early signs of consumption constraints in developed countries and a slowdown in marginal demand growth in the Asia Pacific.

From 2016 to 2019, the gravity center continued to shift eastward, moving from 26.22°E, 32.33°N to 28.39°E, 32.67°N. This shift was primarily driven by the Asia Pacific region (Figure 2), particularly China (Table 2). Although the government introduced policies to reduce oil consumption, the overall demand remained increase in the initial stage of the energy transition. A representative example is the development of electric vehicles (EVs) in China. While the initial adoption of EVs offered potential substitution for conventional fuel vehicles in some extent, its impact remained limited. EV deployment was still at an early stage, and rapid expansion of the transport sector substantially increased total vehicle demand. Consequently, the fleet of fuel-powered vehicles continued to grow, offsetting gains from electrification and contributing to the increase trend in oil consumption. Overall, this period reflects an early stage of energy transition, when policy efforts had begun but their effects on oil consumption patterns remained limited.

From 2020 to 2023, the gravity center shifted westward, moving from 31.37°E, 32.87°N to 30.64°E, 32.28°N. During this period, South America played the most significant role in driving the shift (Figure 2). In the post-pandemic recovery phase, oil consumption tended to rebound across many countries, while the Russia–Ukraine conflict further promoted demand in the US and Europe. Interestingly, when the gravity center moved southward, the US, Europe, and China exerted a limited influence on this directional change. Brazil played a significant role in driving the center of gravity southward (Table 2). This suggests that, as major economies such as China, the US, and Europe continue to advance their energy transitions, structural transformations in policies, technologies, and consumption patterns are progressively weakening the traditional drivers of oil demand. The southwestward shift of the gravity center indicates an emerging reconfiguration in the spatial distribution of global oil consumption under the broader process of energy transition.

Driving factors for oil consumption changes

In this section, we examine the factors that have contributed to the changes in oil consumption across three levels (i.e., global, regional, and national levels). Specifically, the four key factors are: economic development, population growth, energy structure, and energy intensity. The analysis we did aims to capture how the influence of each factor evolved over time in the context of the energy transition. In the following sections, we present our results in term of different levels.

Global level

As illustrated in Figure 3, the four driving factors contributed differently to changes in global oil consumption during each period.

From 2008 to 2011, economic development and population growth were the main drivers for the growth of global oil consumption, while energy structure was the primary restraining factor, and energy intensity had a weak inhibitory effect. Following the 2008 global financial crisis, economic recovery boosted oil demand. However, in 2010 and 2011, rapid growth in coal and natural gas consumption reduced oil's share in the primary energy mix.

Compared to the prior 4 years period, economic development exerted a stronger influence on oil consumption from 2012 to 2015, while the effect of population growth slightly increased. Energy structure shifted to promote oil consumption, and the negative effect of energy intensity became more pronounced. During this period, rapid global economic expansion further increased reliance on oil consumption. In addition, the sharp drop in international oil prices in 2014 resulted in a rise in oil's share in the primary energy mix.

During the period of 2016–2019, the contribution of economic development to oil consumption continued to increase, though at a slower pace compared to the increase observed between 2012–2015 and 2008–2011. The effect of population growth on oil consumption slightly declined, while the energy structure returned to a restraining role. The inhibitory effect of energy intensity slightly decreased but still substantially pronounced. It is noteworthy that global economic growth did not slow down during this period, suggesting a reduced dependence of economic development on oil consumption. Rapid growth in the consumption of renewable energy (such as wind and solar power) and natural gas, led to a marked decline in the share of oil in primary energy consumption.

Between 2020 and 2023, the role of economic development in driving oil consumption further intensified. The big difference from the previous three periods is that energy structure shifted to promote oil consumption significantly. the effect of population growth and energy intensity remained relatively unchanged. The COVID-19 pandemic in 2020 caused a severe global economic shock, followed by a recovery period that stimulated oil consumption growth. Meanwhile, the 2022 Russia–Ukraine conflict was identified as one of the causes affecting energy structure, which contributed to oil consumption.

Regional level

Figure 4 shows the contributions of the four factors to changes in oil consumption at the regional level over the period 2008–2023.

Between 2008 and 2011, economic development dominantly drove oil consumption in the Asia Pacific, indicating a strong dependence of rapid economic expansion on oil demand. Population growth in the Asia Pacific, North America, and the Middle East also contributed notably to increased oil demand. In contrast, energy structure exerted a marked restraining effect on oil consumption in the Asia Pacific, North America, and Europe. Furthermore, improvements in energy intensity in North America and Europe significantly reduced oil consumption.

During the period of 2012–2015, economic development further drove oil consumption in the Asia Pacific. Notably, the effect of economic development on oil consumption in North America and Europe shifted from negative to positive, indicating an increasing reliance on oil to support economic development in these regions. The impact of population growth on oil consumption in different regions remained broadly consistent with the previous period. Nonetheless, North America, Europe, and the Asia Pacific showed a marked reduction in the restraining effect of energy structure. This trend was particularly obvious in Europe, where the effect shifted from constraint to promotion. This shift is primarily attributed to a rising share of oil in the primary energy mix. Energy intensity remained reduce oil consumption in North America. In contrast, its impact in the Asia Pacific and Europe strengthened considerably.

During the years 2016–2019, economic development continued to be the strongest driver of oil consumption in the Asia Pacific. And the positive influence of economic development in North America and Europe also further increased, but with a slower growth rate compared to the previous period. Population growth continued to drive oil consumption notably in the Asia Pacific, North America, and the Middle East, but its impact in North America and the Middle East trended to decrease with respect to the earlier period. The promoting effect of energy structure weakened in Europe, while its restraining influence strengthened in North America and Asia Pacific. This indicates more effective structural adjustments in these regions. North America, Europe, and the Asia Pacific remained the key regions where energy intensity exerted the strongest influence. Compared with the previous period, the inhibiting effect of energy intensity slightly strengthened in North America, declined in Europe, and weakened substantially in the Asia Pacific.

During the period of 2020–2023, economic development played a particularly prominent role in driving oil consumption in the Asia Pacific, North America, and Europe, though its effect on oil demand increased across all regions. Instead, the influence of population growth declined in all regions, with the most pronounced extent in the Asia Pacific. The effectiveness of energy structure in reducing oil consumption got weakened notably in all regions. One of primary reasons was the outbreak of the COVID-19 pandemic in 2020, which restricted mobility and disrupted industrial activity. The restraining effect of energy intensity became strengthened in Europe, weakened in both North America and Asia Pacific. Additionally, in the Middle East, energy intensity shifted to a positive driver of oil consumption growth.

National level

To further investigate the driving forces behind the shifting global center of oil consumption, a set of representative countries were selected for detailed analysis, including Saudi Arabia, the US, the EU, China, and India. It is worth noting that, given the progress made in the construction of a unified internal market, the EU is treated as a single entity in this study. Among these countries, Saudi Arabia exemplifies a country with both extensive oil production and oil consumption. The US and the EU are indicative of developed countries having high oil demand. China and India represents developing countries with substantial oil demand. The influence of various factors on oil consumption in these countries is illustrated in Figure 5.

As a major player in the global oil market, Saudi Arabia is heavily dependent on oil consumption for its economic development. During the periods of 2008–2011 and 2012–2015, all four examined factors positively contributed to oil consumption. However, during the 2016–2019 period, except population growth, rest of three factors exerted a restraining effect on oil demand. A key reason for this shift was the launch of the Saudi Vision 2030 initiative in 2016, which emphasized the localization and development of non-oil sectors. Driven by this strategy, Saudi Arabia's non-oil GDP increased by 27.3% between 2016 and 2023 (Vision 2030, 2024). The country also expanded the production and utilization of natural gas, which was the primary energy source replacing oil during 2016–2019, especially in the power sector, whereas renewables still played a negligible role during this period. As a result, the share of oil in the primary energy mix declined from 66.85% in 2016 to 62.48% in 2019 (Energy Institute, 2024). In addition, Vision 2030 promoted a shift in the economic structure toward non-oil industries, characterized by lower energy intensity. In the period of 2020–2023, the effects of energy structure and economic development on oil demand turned positive, while energy intensity showed a slight inhibitory effect. The COVID-19 outbreak in 2020 significantly disrupted economic activities and reduced domestic oil demand. As the economy recovered, oil consumption rebounded accordingly. Furthermore, following the onset of the Russia–Ukraine conflict, global oil supply chains experienced significant disruptions. As a major oil producer, Saudi Arabia increased oil production to cater rising global demand, which in turn led to a rise in domestic energy use in oil-related sectors.

The US, ranking among the world's top oil-consuming countries, experienced significant shifts in oil consumption between 2008 and 2023. From 2008 to 2011, oil consumption was constrained by energy structure, energy intensity, and economic development. During this period, technological breakthroughs in horizontal drilling and hydraulic fracturing facilitated the production in shale gas. These innovations substantially improved energy efficiency and simultaneously reduced the relative importance of oil within US energy. Between 2012 and 2015, the roles of energy structure and economic development shifted from restraining to promoting. This shift was primarily driven by the sharp collapse in international oil prices in 2014, which altered consumption dynamics by reducing costs and reinvigorating demand. In 2017, the America First Energy Plan accelerated fossil fuel development, boosting domestic oil use and enhancing the impact of economic development on oil consumption. It is noteworthy that the increase in the driving effect of economic development on oil consumption during 2012–2015 to 2016–2019 was considerably smaller than that observed from 2008–2011 to 2012–2015. One major reason was that conventional internal combustion engine vehicles had been progressively replaced by EVs. EV stock in 2019 increased by 55.15% than it in 2016 (IEA, 2024b). In parallel, the exploitation of shale gas and extended investment tax credits drove up natural gas use and solar PV capacity, further reinforcing the restraining effect of energy structure. From 2020 to 2023, the contributions of both economic development and energy structure to oil consumption increased. One critical driver was the economic recovery in post-pandemic period, which led to a rebound in energy demand. In addition, the Russia–Ukraine conflict resulted in an increase in European dependence on the US oil imports. This increase was also attributed to development of shale oil in US, which boosted the domestic share of oil consumption (i.e., to 38.03%; Energy Institute, 2024).

As a developed economy, the EU has undergone notable changes in oil consumption over time. From 2008 to 2011, oil consumption in the EU, similar to the US, was constrained by energy structure, energy intensity, and economic development. The primary cause was subdued economic performance. In addition, the EU adopted a series of directives, such as the Renewable Energy Directive and the Energy Efficiency Directive, to reduce oil dependence and promote the development of renewable energy and enhancing fuel efficiency. From 2012 to 2015, in response to the sharp drop in international oil prices, the effects of energy structure and economic development shifted toward promoting oil consumption. Between 2016 and 2019, the driving effect of economic development further increased with supports from industrial structural adjustments. During this period, the value added from the services sector rose by 7.19% (World Bank, 2024a). Nevertheless, the rising penetration of EVs slowed the growth rate of the contribution of economic development to oil consumption, which is consistent with the situation in the US. Compared to 2016, the EU's EV stock in 2019 increased by 208.27% (IEA, 2024b). From 2020 to 2023, the driving effect of energy structure increased markedly. The Russia–Ukraine conflict led to a sharp reduction in natural gas supplies to the EU, prompting a partial substitution of natural gas by oil in some sectors. As a result, the share of oil in the EU's primary energy rose to 36.58% in 2023 (Energy Institute, 2024).

China, as a major oil-consuming developing country, experienced a continuous increase in oil consumption between 2008 and 2023. Nevertheless, the contribution of various factors varied across different periods. Throughout the study period, economic development was always the primary driver of China's rising oil demand. One of the main reasons was the expansion of the industrial sector, which accounted for the largest share of China's GDP and reached 31.7% in 2023 (National Bureau of Statistics of China, 2024). Industrial demand for oil rose sharply, reaching 4,167,928 TJ in 2022, representing a 117.7% increase compared to 2008 (IEA, n.d.a). From 2012 to 2015, the collapse in international oil prices notably reinforced the driving role of energy structure. The effect of energy intensity in reducing oil consumption strengthened, mainly due to the implementation of the 12th Five-Year Plan for Energy Development and ongoing industrial upgrading. During this period, China's economic structure shifted rapidly from energy-intensive heavy industry toward services, with the share of industrial value added in GDP decreasing by 4.58% (World Bank, 2024b) and that of services increasing by 5.31% (World Bank, 2024c). Following the release of the 13th Five-Year Plan in 2016, a higher share of non-fossil fuels was proposed, the promoting effect of energy structure on oil consumption declined notably. The rapid expansion of EVs slowed oil demand in the transport sector. In 2022, oil consumption in China's transport sector reached 200.01 Mt, showing little change compared to 206.63 Mt in 2015 (National Bureau of Statistics of China, 2024). In the meanwhile, natural gas and non-fossil energy consumption grew by 93.29% and 86.81%, respectively, from 2016 to 2023 (Energy Institute, 2024).

In India, across the four observed periods, economic development and population growth consistently exerted a positive influence on oil consumption, while energy intensity and energy structure had a suppressive effect. Although the overall influence of these factors remained relatively stable, the drivers varied by period. Between 2008 and 2011, economic recovery following the global financial crisis drove the development of related sectors. Value added in the services sector increased by 24.06% (World Bank, 2024a), which in turn boosted demand for logistics and transport services. As a result, oil consumption in the transport sector rose by 26.86% (IEA, n.d.b). From 2012 to 2015, the key driver was the launch of the “Make in India” initiative by the Modi administration, which emphasized industrial development. In this period, oil consumption in the industrial sector rose by 38.50% (IEA, n.d.b). From 2016 to 2019, growing oil demand from the services sector became the dominant factor. In 2019, the value added by services reached a record high of 50.08% of GDP (World Bank, 2024c). However, limited infrastructures, such as a lack of charging stations, outdated technology and weak policy support, hindered the adoption of EVs. Consequently, demand for oil from conventional fuel vehicles continued to grow. From 2020 to 2023, post-pandemic economic recovery and the decline in Russian oil prices due to Western sanctions following the Russia–Ukraine conflict substantially boosted oil consumption. India's oil imports from Russia surged by 714.84% in 2022 relative to 2021 and by 140.19% in 2023 relative to 2022 (UN Comtrade, 2024).

Impacts of energy transition on the driving factors

Based on the analysis above, this section summarizes the effectiveness of the energy transition in reshaping the key drivers of oil consumption. These insights are intended to reinforce ambition in the transition process and support policymakers in designing more effective measurements to accelerate energy transition. Population growth is not discussed separately in this section, as its effect may partly overlap with the scale effect captured by economic development.

Economic development perspective

The energy transition has promoted the decoupling of economic growth from oil consumption, although such decoupling remains limited and varies significantly across countries. This is consistent with previous evidence on the limited decoupling between economic growth and fossil fuel use across countries (Papież et al., 2022). While economic development has been the main driver of global oil demand, its growth contribution slowed markedly during 2016–2019 (Figure 3), especially in North America, Europe, and Asia Pacific. In the Middle East, economic development even showed a restraining effect (Figure 4), with Saudi Arabia being the most prominent case. After the launch of Saudi Vision 2030, the country promoted the development of non-oil sectors and reduced oil dependence through industrial diversification. In addition, the rise of EVs has led to a weakening link between economic growth and oil consumption in developed regions such as the US and the EU. Nevertheless, for many developing countries, this decoupling process remains at an early stage. For instance, in China, economic expansion in the industrial sector remained a strong driver of oil demand growth. Similarly, in India, the development of both manufacturing and services has led to a steady increase in oil consumption.

Energy structure perspective

The energy transition has accelerated adjustments in the global energy structure, contributing to a reduction in oil consumption, which is consistent with previous studies on the long-term effects of transport electrification and related technological shifts on oil demand (Cherif et al., 2017). However, its effects remain sensitive to external shocks. From 2016 to 2019, the restraining effect of energy structure on oil demand strengthened globally and across regions (Figures 3 and 4). Countries such as China and the US implemented policies, aimed at increasing the share of renewables and reducing reliance on fossil fuels, particularly oil. As a result, oil's share in the primary energy mix gradually declined, with renewables and natural gas serving as the main alternative energy sources. Natural gas, in particular, played a transitional role in slowing oil demand growth. Between 2016 and 2019, the share of natural gas in primary energy consumption increased by 1.74% in China and 2.90% in the US (Energy Institute, 2024). In Saudi Arabia, following the introduction of Saudi Vision 2030, natural gas consumption experienced a notable increase, with its share increasing by 4.34% in 2019 (Energy Institute, 2024), particularly as a substitute for oil in power generation. Nevertheless, oil remains a central pillar of the energy system. During major shocks in 2014, 2020, and 2022, the inhibitory effect of energy structure on oil demand was markedly reduced.

Energy intensity perspective

The energy transition has contributed to improving energy efficiency and reducing oil consumption, although its impact remains limited in countries with relatively backward technology. This interpretation is consistent with previous discussions by the (IEA 2023a). Energy intensity is a key factor in reducing oil demand. Between 2012 and 2015, energy intensity exerted the strongest restraining effect on global oil consumption. Although its impact got weakened after 2016, it remained a significant constraint (Figure 3). The weakening of the effect of energy intensity was particularly evident in the Asia Pacific (Figure 4). During 2012–2015, China underwent accelerated industrial restructuring, shifting from heavy industry to services. Although the pace of transformation slowed after 2016, the share of value added from the services sector continued to rise. In Saudi Arabia, Vision 2030 supported diversification and reduced oil dependence. In the US and the EU, energy transition drove technological progress and improved fuel efficiency, which was conducive to a decline in oil demand, consistent with previous findings that technological progress and structural transformation are important drivers of efficiency gains, especially in advanced economies (Díaz et al., 2019). However, energy intensity had a limited impact in India due to inadequate infrastructures and slower technological advancement.

Discussion on oil substitution pathways and the role of electricity mix

The decline in oil's share in primary energy consumption should not be understood as a simple one-to-one replacement by a single alternative energy source. Instead, it reflects different substitution pathways across sectors and countries. In many cases, oil is first displaced at the end-use level, particularly in transport, where electrification substitutes for gasoline and diesel consumption (IEA, 2024b). However, the emissions implications of this process depend on the electricity generation mix, since the decarbonization effect of oil substitution is conditioned by the carbon intensity of power supply (Abdul-Manan et al., 2022). Therefore, oil substitution should be considered from two related dimensions: direct substitution in end-use sectors and the power-sector conditions that shape the environmental consequences of this substitution.

Cross-country evidence indicates that the decline in oil use has followed different transition pathways rather than a uniform pattern. In Norway, large-scale deployment of EVs has reduced oil use in transport under a predominantly low-carbon power system, where hydropower accounts for the overwhelming majority of electricity generation, allowing oil displacement to be accompanied by relatively strong emissions benefits (IEA, 2022; Mustafa, 2026). In the US, transport electrification has expanded alongside a power-sector transition characterized by both renewable energy growth and coal-to-gas switching (IEA, 2023b). It suggests that oil substitution has been supported by a combination of low-carbon and transitional electricity sources. China presents another important case. Although the diffusion of EVs has accelerated end-use electrification, the power mix remains in transition, with renewable energy expanding rapidly while thermal power continues to account for a substantial share of electricity supply. In this context, the emissions implications of oil substitution remain closely linked to further progress in power-sector decarbonization (IEA, 2024b; IRENA (International Renewable Energy Agency), 2022). In India, the adoption of EVs has yet to reach the scale observed in leading markets, and even with further electrification, the emissions gains are likely to remain conditional on near-term grid decarbonization (Abdul-Manan et al., 2022). Saudi Arabia follows a different pathway. As an oil-producing economy, the decline in domestic oil use is driven less by transport electrification than by reduced use of liquid fuels in power generation, a transition currently led mainly by natural gas substitution and complemented by the medium-term expansion of renewable energy (IEA, 2023c; Ministry of Energy of Saudi Arabia, 2023). Taken together, these cases suggest that declining oil use reflects country-specific combinations of end-use electrification, power-sector transformation, and policy support, rather than a single substitution mechanism.

The role of EVs should therefore be interpreted with some caution. At the end-use level, the deployment of EVs directly reduces oil consumption by replacing petroleum-based transport fuels (IEA, 2024b). This oil-saving effect does not, however, translate automatically into the same degree of emissions reduction across countries, because the latter depends on the carbon intensity of electricity generation (Onat et al., 2015). In relatively clean power systems, EV expansion can reduce both oil demand and emissions (Buberger et al., 2022). However, in thermal-power-dominated systems, EVs may still displace oil, but with smaller carbon benefits (Huo et al., 2015). The effectiveness of EVs should be assessed not only in terms of oil displacement, but also in relation to changes in the electricity mix, particularly the expansion of renewable power (IEA, 2024b; Abdul-Manan et al., 2022). Overall, these cases suggest that oil substitution is increasingly associated with end-use electrification and has made positive progress across countries, but its emissions reduction potential has not yet been fully realized and still depends on further decarbonization of the power sector.

With the escalation of geopolitical tensions and intensifying competition among great powers, global climate action has stalled and ambition for energy transition has been undermined. To this end, this study evaluated the progress of the transition by analyzing its spatial patterns and driving forces. On the one hand, the center of gravity method and Shapley decomposition were employed to examine the directional shifts in global oil consumption from 2008 to 2023, along with the marginal contributions of different regions. On the other hand, the LMDI decomposition method was used to assess the impacts of four key drivers—economic development, population growth, energy structure, and energy efficiency—on oil consumption at the global, regional, and national levels. Based on these analyses, the study further identified how energy transition efforts have reshaped the influence of these underlying factors.

Overall, the energy transition has already shown positive effects in reducing oil consumption. Specifically, the structural impacts of the global transition are becoming increasingly apparent, as oil demand in developed economies, particularly in Europe and the US, has been progressively constrained by policy adjustments, technological innovations, and changes in consumption behavior. This has contributed to a trend of spatial rebalance of oil consumption, shifting toward developing regions. Meanwhile, the transition has promoted a relative decoupling of oil consumption from economic development and population growth, accelerated adjustments in the energy mix, and improved energy efficiency, all of which support the broader decline in global oil demand.

Nevertheless, there are significant differences in the outcomes of energy transitions among countries. In oil-producing countries such as Saudi Arabia, recent efforts to promote industrial diversification have created conditions for reducing domestic oil use, but this process is reflected less in end-use electrification than in the reduced use of liquid fuels in power generation. So far, this process has been driven mainly by the expansion of natural gas, while the role of renewable energy, particularly wind and solar, remains relatively limited.

In contrast, countries with strong transition capacity, such as China, the US, and EU member states, have achieved more significant progress. This has mainly been driven by greater investment in research and development, faster adoption of EVs, and large-scale deployment of renewables. But even so, economic growth continues to exert upward pressure on oil consumption in these countries. At the same time, further decarbonization of the power system, particularly through the continued expansion of renewable energy, remains essential.

In underdeveloped countries with limited transition capacity, such as India, progress has been notably slower. Continued growth in manufacturing and services has sustained relatively high oil demand, while constraints in technological capability and infrastructure have limited the expansion of EVs. It is also worth noting that continued decarbonization of the power sector remains important for strengthening the effects of transport electrification.

To adapt to specific situation in countries, this study attempts to propose targeted policy recommendations aimed at promoting a more effective and inclusive energy transition.

For oil-producing countries

Oil-producing countries should continue to advance economic diversification in order to reduce structural dependence on oil revenues. This requires not only supporting the development of non-oil sectors, but also creating conditions for a gradual reduction in domestic oil use. Given that oil substitution in these countries is currently reflected more in the reduced use of liquid fuels in power generation than in end-use electrification, policy efforts should focus on accelerating the replacement of oil-fired power with natural gas in the short term and expanding renewable energy in the medium to long term.

At the same time, governments should strengthen policy support through clear renewable energy targets, fiscal incentives, concessional financing, and grid modernization. Improving power-system flexibility and expanding storage capacity will also be important for integrating intermittent renewable energy and reducing continued reliance on oil and gas in domestic energy systems. Through a coordinated strategy of economic diversification and power-sector transformation, oil-producing countries can improve economic resilience while creating a more sustainable basis for long-term transition.

For countries with strong transition capacity

Countries with strong transition capacity should continue to deepen the decarbonization of both end-use sectors and power systems. In these countries, substantial progress has already been made through rapid EV deployment, technological innovation, and large-scale renewable energy expansion. The next priority is to further accelerate electrification in transport, industry, and buildings while ensuring that the electricity used in these sectors is increasingly supplied by low-carbon sources. In particular, continued expansion of renewable power, grid upgrading, and storage deployment remain essential for strengthening the emissions benefits of oil substitution.

Beyond domestic efforts, these countries should also assume greater international responsibility by increasing support for climate finance, facilitating technology transfer, and sharing policy and regulatory experience with developing economies. In this way, countries with strong transition capacity can not only consolidate their own transition gains, but also contribute to a more inclusive and coordinated global energy transition.

For countries with limited transition capacity

Countries with limited transition capacity should prioritize the removal of structural constraints that hinder clean energy adoption. In many of these countries, rising oil demand is still closely linked to economic expansion, while inadequate technological capability, infrastructure, and financing limit the diffusion of EVs and other low-carbon technologies. Policy efforts should therefore focus on strengthening domestic capabilities in clean energy technology, expanding charging and power infrastructure, and improving institutional support for renewable energy and electrification. At the same time, greater attention should be paid to power-sector decarbonization, since the benefits of transport electrification depend not only on the adoption of EVs but also on the carbon intensity of electricity generation.

International cooperation will be particularly important for these countries. Targeted support in the form of technology transfer, concessional finance, capacity-building, and infrastructure investment can help lower the barriers to transition and strengthen endogenous development capacity. By combining domestic capability-building with external support, countries with limited transition capacity can gradually narrow the transition gap and achieve more sustainable reductions in oil dependence.