BP: Gas to become second largest fuel source by 2035

The point at which global oil demand will peak, depends on GDP growth, efficiency trends and climate policy, according to the report.

But BP analysts believe that the pace of growth gradually slows, as transport efficiency improves and the degree of fuel switching builds.

"A simple extrapolation of these trends would suggest that oil demand may start to decline during the mid-2040s. But it might peak much sooner or later,” said the report.

The analysts expect oil, gas and coal to remain the dominant sources of energy powering the world economy, accounting for more than three-quarters of total energy supplies in 2035 (down from 85 percent in 2015).

"Out of these, gas is the fastest growing fuel (1.6 percent per annum), with its share in primary energy increasing as it overtakes coal to be the second largest fuel source by 2035,” said the report.

BP said that oil continues to grow (0.7 percent per annum), although its pace of growth is expected to slow gradually.