Global oil demand will continue rising until 2029, according to the International Energy Agency (IEA). The Paris-based energy watchdog forecasts oil demand reaching a peak of 105.6 million barrels per day (bpd) before slightly declining in 2030.
The IEA’s outlook underscores the impact of diverging energy transitions globally. While China, once the fastest-growing oil consumer, faces an economic slowdown and accelerates its shift to electric vehicles (EVs), the United States is seeing demand grow, driven by cheaper gasoline prices and a slower adoption of EVs. The agency now expects U.S. oil demand in 2030 to be 1.1 million bpd higher than previously forecast.
“Based on the fundamentals, oil markets look well-supplied in the years ahead,” said Fatih Birol, IEA Executive Director. “But recent events sharply highlight the significant geopolitical risks to oil supply security.”
Supply outpaces demand as geopolitical tensions loom
The IEA report notes that global oil production capacity is expected to rise to 114.7 million bpd by 2030, exceeding demand forecasts and pointing to a well-supplied market if geopolitical disruptions are avoided.
Tensions in the Middle East, especially the ongoing conflict between Israel and Iran, have pushed oil prices up by 5% to above $74 a barrel as of last Friday. Yet, the IEA maintains that supply is set to outpace demand this year, with global supply increasing by 1.8 million bpd—200,000 bpd more than last month’s estimate—largely due to higher OPEC+ output.
Meanwhile, demand is projected to rise by 720,000 bpd in 2025, a slight downward revision from earlier expectations. The IEA’s separate commentary also highlights that the oil market is in stable shape for the short term without a major supply disruption.
China slows, U.S. surges as energy landscape shifts
China, the world’s second-largest economy, is undergoing a structural transformation. The IEA projects China’s oil demand will peak in 2027, primarily due to surging EV sales, expanded high-speed rail, and increased use of natural gas trucks.
Unlike the previous year’s report, which forecast a 1 million bpd growth in Chinese demand by 2030, the IEA now expects only marginal growth from 2024 levels. Meanwhile, the U.S. is shifting in the opposite direction. The share of EVs in U.S. car sales by 2030 has been revised to 20%, from 55% projected last year, suggesting prolonged reliance on fossil fuels.
The IEA’s view contrasts sharply with OPEC’s, which maintains that oil demand will continue to rise with no foreseeable peak.
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