Key agency sticks to its guns on peak oil demand
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The International Energy Agency is sticking by its controversial view that global oil demand growth will end this decade, even dipping slightly in 2030.
Why it matters: The timing of a peak — and more importantly, the slope of any decline — affects everything from emissions to investment strategies.
The latest: IEA sees growth of roughly 700,000 barrels per day this year and next, and then increases slow to "a trickle" for the rest of the decade.
- "This is driven by below-trend economic growth, weighed down by global trade tensions and fiscal imbalances, and the accelerating substitution away from oil in the transport and power generation sectors."
- The annual look-aheads are based on today's policies and market trends and needless to say are stuffed with uncertainties.
Zoom in: While IEA is sticking with its overall demand outlook, specific markets are shifting.
- Chinese oil consumption in 2030 will only be "marginally higher" than in 2024, IEA now projects, citing rapid EV growth and other forces.
- But in the U.S., IEA revised its 2030 demand forecast upward by 1.1 million barrels per day, citing lower gasoline prices and "loss of momentum in EV adoption."
The intrigue: The agency just lowered its U.S. shale outlook as low prices prompt companies to scale back and the sector consolidates.
- It now sees shale largely plateauing for the rest of the 2020s.
- The new report projects U.S. production of "light tight oil" (basically shale) at 9.8 mbd in 2030, compared to 10.6 mbd in 2030 in last year's version.
The bottom line: IEA predicts global production capacity rising faster than demand, with a "comfortably supplied oil market through 2030."
- But as the current Mideast crisis shows, there's a lot in flux.
