IEA: World oil demand will continue to grow this decade despite China's peak in 2027
The International Energy Agency (IEA) said that global oil demand will continue to grow until the end of the decade, despite a peak in China, the top importer, in 2027. This is because cheaper gasoline in the United States and a slower adoption rate for electric vehicles in this country support consumption.
The IEA (which advises industrialised nations) did not alter its prediction that China's demand would peak earlier than 2029 due to the growth of electric vehicles.
The Organization of the Petroleum Exporting Countries' (OPEC) view, that the global demand will peak within a few short years, is in sharp contrast to the opinion of the group of producers. OPEC believes that consumption will continue to grow and does not predict a peak.
A table from the IEA annual report in Paris shows that oil demand will reach a peak of 105.6 million barrels a day (bpd), by 2029, and then begin to decline in 2030. Global production capacity will rise by over 5 million barrels per day (bpd) to 114.7 millions bpd in 2030, according to the IEA's annual report.
Conflict between Israel and Iran highlighted the risks to Middle East oil supplies, which helped send oil prices higher by 5% on Friday to over $74 per barrel. The IEA stated that the latest forecasts indicate ample supplies until 2030 if no major disruptions occur.
Fatih Bilo, IEA's Executive Director, said in a press release that the oil market will be adequately supplied in the coming years. Birol stated that recent events have brought to light the geopolitical threats to oil supply.
The IEA stated in a separate report published on Tuesday that the global market is well-supplied this year, despite the fact that the growth of supply has outpaced the demand.
The IEA forecasts that world demand will increase by 720,000 bpd in this year. This is down 20,000 bpd compared to last month's estimate. The IEA said that supply will rise by 1.8m bpd. This is up 200,000 bpd compared to last month.
CHINA PEAK
China's oil demand contribution has slowed down after decades of being the leader in global growth. It is now facing economic challenges and a major shift to electric vehicles.
The IEA has predicted that the world's second largest economy will see its oil consumption reach a peak in 2027. This is due to a surge in EVs sales, as well as the deployment of natural gas-powered trucks and high-speed trains. The IEA predicted in February that China's demand may already have peaked for fuels used in road and air transportation.
The IEA has said that China's total oil demand in 2030 will only be marginally higher than it was in 2024. This is compared to the growth of 1 million bpd predicted in last year's IEA report.
The IEA reported that lower gasoline prices in the United States and slower EV adoption have increased the 2030 oil consumption forecast by 1.1 millions bpd compared to the previous prediction.
The report stated that electric cars are expected to represent 20% of total U.S. car sales by 2030, compared to the 55% estimated last year.
Since taking office, U.S. president Donald Trump has demanded that OPEC lowers oil prices and taken aim at EVs by signing resolutions approved in Congress to bar California's EV sale mandates. (Reporting and editing by Tomaszjanowski and Susan Fenton; Enes Tunagar and Alex Lawler)
(source: Reuters)
