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Expand chart

Global oil demand is slated to rise above pre-pandemic levels over the next few years but nonetheless remain lower than it would have been absent COVID-19's emergence, a new International Energy Agency analysis project.

Why it matters: The pandemic is certainly having a lasting effect — its mid-decade demand estimate is 2.5 million barrels per day lower than the growth level expected before the crisis.

  • Global gasoline consumption will probably never reach pre-pandemic levels.
  • Yet IEA's estimate also shows that oil demand will still reach fresh records, a sign that nations have not yet responded to the pandemic with the kinds of clean energy policies that IEA and others had hoped.

What they're saying: "For the world’s oil demand to peak anytime soon, significant action is needed immediately to improve fuel efficiency standards, boost electric vehicle sales and curb oil use in the power sector," IEA head Fatih Birol said.

What we're watching: The report lays out a basket of policies that could alter the underlying trajectory.

  • That means the ones Birol name-checked above, alongside more telework and less business travel, and more recycling that lessens oil growth in the petrochemical sector.
  • All that together could displace 5.6 million barrels per day by 2026, "which would mean that oil demand never gets back to pre-crisis levels."

The big picture: The report compares the mid-decade forecasts to the global oil consumption path that would be consistent with the Paris climate agreement.

  • The "base case" sees demand 3.5 million barrels per day higher in 2025 than 2019's levels.
  • But under IEA's Paris-aligned "sustainable development scenario," oil demand would need to decline by 3 million barrels per day over the stretch.

Of note: All the demand growth they project through the mid-2020s comes from non-OECD nations, with demand in Asia rising strongly.

  • On the production side, IEA sees several forces combining to limit the U.S. bounce-back from last year's declines, with only "modest growth" expected over the next half-decade.
  • There's less cheap capital available, industry investment is more conservative, climate pressures are greater and new Biden administration regulations are expected.
  • "The slowdown in US production growth clears the way for OPEC+ to fill much of the supply gap as it taps into its spare capacity," IEA notes.

What we're reading: Speaking of oil, the Financial Times summarizes IEA's separate monthly report out this morning: "The expectation of Wall Street banks that oil has entered a new and sustained period of dramatic price rises is misguided, said the [IEA] on Wednesday."

Go deeper

39 mins ago - World

Scoop: U.S. and Israel to hold strategic Iran talks on Tuesday

Jake Sullivan. Photo: Jim Lo Scalzo/EPA/Bloomberg via Getty

Top national security officials from the U.S. and Israel will convene virtually on Tuesday for a second round of strategic talks on Iran, three Israeli officials tell me.

Why it matters: The talks come two days after an explosion at an Iranian nuclear facility that experts consider a likely act of Israeli sabotage, and one day before the U.S. resumes indirect nuclear talks in Vienna over a return to the 2015 nuclear deal — a prospect that has raised anxiety levels in Jerusalem.

Updated 46 mins ago - Axios Twin Cities

Police: Officer who shot Daunte Wright accidentally pulled gun instead of taser

The officer who fatally shot Daunte Wright, a 20-year-old Black man, outside Minneapolis Sunday appeared to have inadvertently pulled out her gun instead of a taser, police said.

Driving the news: "This appears to me, from what I viewed in the officer's reaction and distress immediately after, that this was an accidental discharge that resulted in the tragic death of Mr. Wright," Brooklyn Center Police Chief Tim Gannon told reporters Monday.

Updated 2 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Annelise Capossela/Axios

  1. Health: The warning signs of a longer pandemic — CDC director: Answer to Michigan COVID-19 surge is "to close things down."
  2. Vaccines: Former FDA chief offers reality check on vaccine passports.
  3. Economy: Jobs growth could be curbed by demands for higher wages.
  4. World: Facebook to push notifications about vaccine eligibility to 20 countries outside of the U.S. — Brits flock to pubs for first time in months as U.K. lockdown eases.
  5. Variant tracker: Where different strains are spreading.