IEA: Global Oil Demand Will Peak Before 2030, Demand Growth Slows

The International Energy Agency (IEA) said on Wednesday (June 14) that global oil demand growth will gradually slow in the next few years as the world is accelerating its transition away from fossil fuels driven by last year's high oil prices and the conflict between Russia and Ukraine.

In a medium-term outlook, the IEA forecasts that, based on current government policies and market trends, global oil demand will grow by 6% between 2022 and 2028 to reach 105.7 million bpd, currently underpinned by strong demand from the petrochemical and aviation sectors.

However, despite the cumulative growth, annual demand growth is expected to decrease from 2.4 million barrels per day this year to 400,000 barrels per day in 2028. Almost at a standstill, peak demand could be just around the corner.

The global oil market is slowly adjusting after a turbulent three-year period, with the Russia-Ukraine conflict reshuffling global trade flows.

This time, the IEA also gave short-term and long-term prospects for the global oil market, which are very different.

In the short term, the global oil market could tighten significantly in the coming months due to a rebound in China's fuel consumption in 2023 and the announcement of production cuts by OPEC+ producers led by Saudi Arabia; next year also looks tight.

In the long term, however, the global dependence on hydrocarbons (oil, etc.) will decrease in the coming years.

Oil demand growth in China is also expected to slow significantly from 2024 onwards.

A long-term forecast by the IEA, released in November, suggested oil demand would plateau in the 2030s, with a possible decline thereafter.

As for oil supply, the IEA said that although OPEC+ countries have announced production cuts, oil producers outside the alliance will dominate global supply capacity in the medium term, with the United States, Brazil and Guyana expected to add 5.1 million barrels per day by 2028. The market will remain "well supplied" through 2028 as global oil production capacity is still growing, the IEA said.