If almost everyone transitions to EVs, wouldn’t that reduce demand enough for oil to bring it down to < $5? The big problem would then be distribution as gas stations go out of business, but if long distance trucks still use diesel, truck stops could service legacy ICE passenger cars.
Thats the traditional economics thinking but it does not accounts for the internal mechanics of oil producer market. The problem is that not all oil sources in the world cost the same to produce [ref:1]. So you may have plenty of oil available at say $90/bbl but not much at $60 because sources like shale/oil sands or deepwater are offline. This means with mass adoption EVs there still would be some oil producers willing to sell cheap but most would be offline for foreseeable future. This has deep implications for oil infra as that cannot be turned on a dime & needs constant development & upkeep. plus there will be not much ROI on long term horizon so financing would be difficult.
Overall I don't see mass EV adoption as a good news for crude oil. If I can get a little conspiratorial IMO this is the reason why there is such a strong push from hydrogen lobby as it provide them for an outlet for existing fossil infra and hope that they can keep it alive with massive lobbying and subsidies.
If everyone transitions to EVs, the remaining gasoline users would have to pay a lot more of the infrastructure. Pipelines, oil platform, refineries etc, are all expensive.
Yeah, if demand drastically dropped price would likely drop. The main point was that ICEs also have significant maintenance & energy costs. Sticking it out with gas doesn't mean you won't be facing thousands of dollars of additional costs over the life of the car.
