Rystad says Southeast Asia EV growth unlikely to curb oil dependence before 2040

By Romel S. Gurky

Southeast Asia is emerging as one of the world’s fastest growing electric vehicle markets, but the region is expected to remain heavily dependent on oil well into the 2030s, according to research firm Rystad Energy

In a market update posted by its New Energies division, Rystad said Southeast Asian countries remain structurally exposed to oil supply risks, particularly through reliance on crude imports transported via the Strait of Hormuz.

The firm said countries in the region typically import around 60% to 95% of their crude oil through the strategic waterway, making them vulnerable to supply disruptions and oil price spikes.

Rystad said recent geopolitical tensions highlighted how quickly supply constraints can translate into fiscal and energy security pressures across the region.

Read also : US-Iran deal may delay, not end, oil supply disruption, says Rystad Energy

The consultancy noted that rapid EV adoption is being driven partly by those energy security concerns. However, rising incomes, urbanization and industrialization are also expected to drive passenger mobility growth averaging around 2.7% annually through 2050 under its “pragmatic scenario.”

According to Rystad, the growth in transport demand is large enough that EV adoption initially absorbs part of new demand growth rather than significantly reducing oil consumption.

As a result, the firm expects oil demand in Southeast Asia to remain resilient and peak only around 2040 under its base case outlook.

Rystad added that a prolonged supply disruption linked to Iran or the Strait of Hormuz could accelerate electrification trends, but current market dynamics suggest EV growth and oil demand will continue rising in parallel for years.

Editing by Alexander Ginting