The International Energy Agency’s (IEA) latest annual medium-term market report for the oil industry has predicted that growth in the world’s demand for oil will slow in the coming years. Despite rising demand from fast-growing economies in Asia, alongside carbon-intensive sectors like aviation, oil use will increase but be increasingly offset by factors such as rising electric car sales, fuel efficiency improvements in conventional vehicles, and a declining use of oil for electricity generation in the Middle East, the IEA said. As such, global demand – which, when including biofuels, averaged just over 102 million barrels a day in 2023 – is expected to level off around 106 million daily barrels by 2030. In parallel, the IEA predicted a surge in global oil production capacity led by the US and other producers in the Americas. This is expected to outstrip demand growth between now and 2030, with total supply capacity forecast to hit nearly 114 million barrels a day by 2030 – eight million per day above projected global demand. Spare capacity could have “significant consequences” for oil markets, the IEA warned. “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,” said IEA Executive Director Fatih Birol. “This report’s projections 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.”
