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Global oil markets face a “major” surplus this decade as the shift away from fossil fuels causes demand to hit a plateau amid plentiful supply growth, the International Energy Agency said.
World consumption will “level off” at 105,6 million barrels a day in 2029, about 4 percent higher than last year’s level, amid surging sales of electric vehicles and improved fuel efficiency, the Paris-based policy adviser said in its annual medium-term outlook.
Meanwhile, oil production capacity continues to surge.
Led by the US, it will be a “staggering” 8 million barrels a day higher than demand by the end of the decade, leaving the biggest buffer of spare output since the depths of the Covid-19 lockdowns.
“As the pandemic rebound loses steam, clean energy transitions advance, and the structure of China’s economy shifts, growth in global oil demand is slowing down,” said Fatih Birol, the IEA’s executive director. “Rising oil supplies could potentially weigh on prices through the end of the decade.”
International oil prices have traded near US$80 a barrel this year as robust demand, conflict in the Middle East and supply restraint by OPEC+ are countered by a flood of new output from the Americas and concerns over China’s economic growth.
World oil consumption will continue to expand for several years, adding about 4 million barrels a day by the end of the decade amid economic expansion in India and China, and growing use by the aviation and petrochemical industries, the IEA said.
But use of the commodity will continue its “decades-long decline” in developed economies, sinking from last year’s 46 million barrels a day to 43 million a day by 2030 — the lowest level since 1991. – Bloomberg
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