The International Energy Agency (IEA) has published a commentary on the global slowdown in the demand for oil. The analysis suggests peak oil consumption is “in view” in this decade, but that the decline on the other side will reflect the central role that oil still plays in the global economy.
The commentary was published alongside the IEA’s Oil Market Report (April 2024).
From the commentary by Toril Bosoni, head of the oil industry and markets division, and Ciarán Healy, oil market analyst:
Organizations
While we expect growth in oil consumption in 2024 (1.2 mb/d) and 2025 (1.1 mb/d) to remain robust by historical standards, structural factors will lead to a gradual easing of oil demand growth over the rest of this decade. Continued rapid gains in the market share of EVs, particularly in China; steady improvements in vehicle fuel economies; and, notably, efforts by Middle Eastern economies, especially Saudi Arabia, to reduce the quantity of oil used in power generation are together expected to generate an overall peak in demand by the turn of the decade.
Oil remains extremely important to the global economy, and across some of its key applications, alternatives still cannot easily be substituted. In the absence of additional energy and climate policies and an increased investment push into clean energy technologies, the decline in global oil demand following the peak will not be a steep one, leaving demand close to current levels for some time. Nevertheless, cooling Chinese demand growth and considerable progress on the deployment of clean energy transition technologies mean that the oil market is set to enter a new and consequential period of transformation.
“Oil demand growing at a slower pace as post-Covid rebound runs its course.” IEA, April 12, 2024.
Read the full commentary published April 12, 2024 at this link.
