With the automotive industry tipped as ripe for disruption and a growing imperative to rein in climate change, the recent rise of electric cars has sparked both excitement and angst of late within the global energy industry.

Tougher emissions regulations, falling battery costs, and breakneck advances in networked technology means affordable alternative to conventional vehicles are on the verge of a mainstream breakthrough.

Once a critical tipping point is reached — so the narrative goes — mass market adoption of electric transport will trigger an abrupt and painful end to the hydrocarbon age, taking with it the fortunes of oil producers.

In reality, the future of electric cars and their impact on oil demand remains far from clear. Forecasts of their market penetration vary widely and require substantial guesses on oil prices, further efficiency in existing motors, and government policies.

One thing that is clear is the potential scale of the disruption for the oil industry. More than 90% of the world’s road transport fleet continues to run on oil products and the sector accounts for over 40% of total oil demand.

So how painful could a radical, faster than expected transition away from oil be for the industry? Last week the International Energy Agency took a stab at answering that question for the first time.

According to a “disjointed transition” scenario in its industry touchstone World Energy Outlook, the answer is potentially “massive”.

Oil demand could collapse by 16.4 million b/d and producers would face “major losses” with $380 billion of above-ground investment written off, the IEA believes, if the oil industry is caught off guard by a surge in green energy use from 2030.

The ‘disjointed’ scenario assumes that, prior to 2030, operators invest on the assumption that prices and demand will continue to rise under its central scenario. But, given the...