IEA oil report shows rise in demand to be offset over the longer term

A new IEA report finds that based on today’s policies and market trends, strong demand from fast-growing economies in Asia, as well as from the aviation and petrochemicals sectors, oil demand will continue to rise in the coming years. By the end of the decade, the United States alone is poised to account for 2.1 million barrels per day of non-OPEC+ gains, while Argentina, Brazil, Canada and Guyana contribute a further 2.7 million barrels per day. But those gains will increasingly be offset due to factors such as rising electric car sales and fuel efficiency improvements in conventional vehicles. As a result, the report forecasts that global oil demand, which including biofuels averaged just over 102 million barrels per day in 2023, will level off near 106 million barrels per day towards the end of this decade. “As the pandemic rebound loses steam, clean energy transitions advance, and the structure of China’s economy shifts, growth in global oil demand is slowing down and set to reach its peak by 2030. This year, we expect demand to rise by around 1 million barrels per day,” said IEA Executive Director Fatih Birol. “This report’s projections, based on the latest data, show a major supply surplus emerging this decade, suggesting that oil companies may want to make sure their business strategies and plans are prepared for the changes taking place.”