Energy Agency Negative on Global Oil Demand, Sets Dates
With projection anchor of electric vehicles, US energy agency has turned its belly up against crude oil potentials in the global commodity market in the coming years.
In its medium term report, the International Energy Agency, IEA, estimated that growth in global oil demand will gradually slow down between 2023 and 2029 and start decreasing after 2029.
Growth in global oil demand is forecast to slow down in the coming years due to the expected increase in electric vehicles (EVs), the decrease in oil use in electricity generation, and the decline in oil demand in China.
Oil demand in the world is expected to rise by 1 million barrels per day (bpd) between 2023 and 2025, by 800,00 bpd between 2025 and 2026, and by 300,000 bpd between 2026 and 2027.
It is also predicted that the increase in demand will eventually decrease to 200,000 bpd between 2027 and 2028 and to 100,000 bpd between 2028 and 2029.
Thus, according to IEA projections, global oil demand is expected to grow by 3.3% by 2029 compared to 2023 and reach 105.6 million bpd. Despite this increase, the annual increase in global oil demand will slow from 1 million bpd this year to about 100,000 bpd in 2029.
Global oil demand in 2030 is also expected to fall by 200,000 barrels to 105.4 million barrels compared to the previous year. Analysts believe that EVs will continue to reduce consumption of fossil fuels. According to the report, the growing use of EVs throughout the world is predicted to reduce demand for other fuel types.
Global EV sales are projected to reach 17 million next year, up 3 million from 2023, with EVs accounting for nearly one in five cars sold globally.
It is also estimated that this rise will continue, with total EV sales increasing to 40 million by 2030. Therefore, by 2030, one in two cars sold worldwide is projected to be electric.
Meanwhile, demand for fuel used on the road is estimated to fall by approximately 6 million bpd due to the increase in EVs. According to the report, China will lead the way in EV sales in 2030, followed by countries in Europe and the US.
Plans by Iraq and Saudi Arabia to use less oil to generate electricity will have an impact on the slowdown in the rise of the world’s oil demand.
Saudi Arabia, the world’s leading oil-consuming country for production purposes, has announced plans to end this dependence by 2030. The country aims to get 50% of its electricity from renewable sources by 2030.
It is forecast that replacing oil for electricity generation with natural gas and solar energy will reduce the quantity of oil used in production by 1.1 million bpd by 2030. In China, which plays an important role in the growth of oil consumption, demand is projected to stagnate by 2030, reaching 18 million bpd, with a modest increase of 1.4 million bpd compared to 2023.
Moreover, oil demand in China is estimated to increase marginally between 2023 and 2025 by 850,000 bpd and by 570,000 bpd between 2025 and 2030. Oil production capacity is expected to rise, with the US leading other producing countries.
Between 2023 and 2030, the total global oil-producing capacity is foreseen to expand by 6 million bpd to 113.8 million bpd. Energy Agency Negative on Global Oil Demand, Sets Dates
