The global effort to curb plastics use means US$400bn worth of petrochemical investments could be stranded.
A study by think tank Carbon Tracker and plastics experts SYSTEMIQ shows the pressure to cut plastics consumption could slash virgin plastic demand growth from 4% a year to under 1%, with demand peaking in 2027.
According to analysts, big oil companies would lose its primary growth driver, making it more likely oil demand peaked as early as 2019.
The petrochemical sector is already facing record-low plastic feedstock prices as a result of massive overcapacity, however supply for virgin plastics is expected to rise by 25% in the next five years, costing US$400bn.
“Remove the plastic pillar holding up the future of the oil industry, and the whole narrative of rising oil demand collapses,” said Kingsmill Bond, a lead author of the study.