But few people realise that oil is a key component of plastic.
If less plastic is being made, there is less demand for oil – less demand equals lower prices and/or output.
So, what does that mean for investors?
Light, cheap and deadly
At a briefing on Wednesday, LGIM fund manager Nick Stansbury highlighted that the demand for plastic has grown 20-fold in the past 50 years and is expected to double again in the next 20 years.
“Plastic’s durability and chemical make-up is killing untold numbers of sea creatures, fish and birds,” he said.
“Nearly every government has committed to reducing plastic usage in response to this global problem.”
With that in mind, Stansbury looked at the key implications of the global clean-up for investors, petrochemical companies and the demand for oil.
The petrochemical industry has a combined market capitalisation of over $2trn (£1.5trn, €1.7trn).
This sector is currently engaged in a large capital spending programme, building new chemical plants all over the world, many of which have expected economic lives of 30 years or longer.
If consumer demand for plastics grows more slowly than the industry expects, it would suffer from global overcapacity, which could potentially significantly affect profitability for this very capital-intensive industry, Stansbury warned.
What does it all mean?
Petrochemicals demand accounts for around 6% of the current total demand for oil and is rising in importance.
Despite this, a major global agency paid scant attention to the subject in its recent long-term outlook report on energy demand.
For most forecasters, as long-term demand for oil used in transportation and power starts to slow down in favour of renewables, petrochemical demand becomes a very important component of total oil demand growth.
For example, in the latest BP Energy Outlook, petrochemical demand growth will make up 40% of all end-use demand growth for oil by 2035.
Given the sensitivity of these forecasts to many small changes in assumptions, such as how many electric vehicles are sold in the intervening period, what happens to petrochemical demand globally matters a lot more than people might currently think.
Oil demand growth has historically played an important stabilising role in rebalancing markets when they become oversupplied, said Stansbury.
However, investors should recognise the risk that long-term oil demand growth cannot be relied upon as plastic and oil consumption is dramatically reduced.
“We cannot pinpoint when peak oil demand will arrive, but we are sure it will happen,” he said.
“The destabilising effect on oil markets will be profound and we believe that investors, and oil companies, need to start taking those risks more seriously.”