U.S. — Goldman Sachs released a research report in May 2026 indicating that accelerated global electric vehicle adoption could lead to reduced oil demand and lower crude prices by late 2027. The report noted that global electric vehicle sales reached 26.1% of all car sales in May 2026.

Global electric vehicle sales increased by 3.4 percentage points since February 2026. This increase occurred across 12 of the 15 largest electric vehicle markets. China's electric vehicle penetration rose by 11.4 percentage points since February 2026, contributing 61% of the total global increase.

Goldman Sachs analysts estimate that the shift to electric vehicles could reduce global oil demand by 0.13 to 0.32 million barrels per day by December 2027. They projected Brent crude could fall to the mid-$50s per barrel by late 2027 if constraints in the Strait of Hormuz persist and electric vehicle momentum continues.

The Strait of Hormuz closed in March 2026. Within weeks, U.S. gas prices exceeded $4 per gallon. Approximately 20% of global oil supply flows through the Strait of Hormuz. "This acceleration in global EV car sales suggests our downside oil price scenario is plausible," the Goldman Sachs commodities team stated in their research report.

Outside of China, OECD markets accounted for 21% of the global increase in electric vehicle penetration since February 2026, with non-OECD markets contributing 19%. In China, electric vehicles comprised nearly 63% of all retail car sales in May 2026, while gasoline vehicles made up 37%.

Electric vehicle penetration in the U.S. increased by 0.1 percentage points since February 2026. New electric vehicle sales in the U.S. totaled approximately 85,000 units in May 2026, representing 5.7% of total vehicle sales. New electric vehicle sales in the U.S. decreased by nearly 22% between May 2025 and May 2026. The estimated reduction in road fuel demand for every 1 million vehicles shifting from internal combustion to electric is 30,000 barrels per day in the U.S. and 20,000 barrels per day outside the U.S.

Why It Matters

The Goldman Sachs research report indicates a potential shift in global oil demand due to increased electric vehicle adoption. This analysis comes after a period marked by disruptions in the global oil supply chain, including the closure of the Strait of Hormuz in March 2026, which impacted gas prices. The projections from Goldman Sachs connect the ongoing transition to electric vehicles with future oil market dynamics.

The report shows varying rates of electric vehicle adoption across different regions. China shows an increase in electric vehicle sales and consumption patterns, with owners of plug-in hybrids increasingly opting to charge rather than refuel, contributing to an estimated year-over-year drop of more than 20% in gasoline and related product sales volumes in the country. In contrast, electric vehicle sales in the U.S. saw a decrease between May 2025 and May 2026, following the expiration of the federal electric vehicle tax credit in late 2025.