The future of global oil demand is currently a subject of debate, with various experts and industry groups offering differing forecasts. Some analysts suggest that global demand for oil is just a few years away from declining, while others believe fossil fuel investments will continue for decades.
The International Energy Agency (IEA) predicts that global oil demand will peak by 2029, after which it will gradually decline as renewable energy sources become more prevalent. This forecast aligns with the global push toward cleaner energy and the increasing adoption of renewable technologies.
“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,” IEA Executive Director Fatih Birol said in a statement.
Contrarily, the Organization of the Petroleum Exporting Countries (OPEC) anticipates that oil demand will continue to grow, projecting an increase of 25 million barrels per day through 2045.
OPEC argues that dismissing the long-term need for oil is “dangerous” and warns that expecting an imminent peak in oil demand could lead to power shortages and unprecedented fluctuations in the energy sector.
“Those that dismiss this reality are sowing the seeds for future energy shortfalls and increased volatility, and opening the door to a world where the gap between the ‘energy haves’ and ‘energy have nots’ grows even further,” OPEC Secretary General Haitham Al Ghais said in a statement. “Stakeholders need to recognize the need for continued oil industry investment, today, tomorrow, and many decades into the future.”
The IEA disagrees with OPEC’s outlook, cautioning instead about a potential upcoming surplus in oil supply. According to the IEA, once oil demand peaks, supply will quickly outpace demand.
IEA data suggests that by 2030, total oil production capacity will reach nearly 114 million barrels per day, which is 8 million barrels per day higher than the projected global demand. This surplus could drive oil prices down to as low as $60 per barrel, marking the most significant price drop since the COVID-19 pandemic.
