ENERGY: IEA expects global oil demand to peak before the end of the decade
Source: newspaper ‘Expresso’
14 June 2023
“The International Energy Agency (IEA) predicts that global oil demand will peak “before the end of the decade,” according to an annual report published today, which for the first time mentions a peak during this period
“The transition to a clean energy economy is accelerating, with a peak in global oil demand in sight before the end of this decade as electric vehicles, energy efficiency and other technologies move forward,” IEA Executive Director, Fatih Birol, said in a statement.
In the 2023 Oil Report, a five-year view of the market, the IEA estimates that global oil demand will continue to grow, but that this growth “is expected to slow significantly by 2028.”
This is sooner than expected: in the previous World Energy Outlook, published in 2022, the Paris-based IEA, part of the OECD, saw “global oil demand recover despite high prices, peaking and stabilizing after 2035.”
According to these new medium-term five-year forecasts, “the use of oil as a fuel for transport is expected to decline” after 2026.
But this decline is expected to be slowed by “flourishing” demand for petrochemicals and strong consumption growth in emerging economies, which will “more than offset” the contraction in demand in advanced economies, the IEA said.
High energy prices and security of supply problems highlighted by the global energy crisis, exacerbated by the war in Ukraine, are accelerating the transition to cleaner energy technologies.
“Based on current government policies and market trends, global oil demand will increase by 6% between 2022 and 2028, reaching 105.7 million barrels per day – supported by strong demand from the petrochemical and aviation sectors,” the IEA experts write.
Despite this cumulative increase, annual demand growth is expected to decline from 2.4 million barrels per day this year to just 0.4 million barrels per day in 2028, pointing to a peak in demand. ”
