World oil demand will reach its maximum level “before the end of the decade,” according to an annual report published on Wednesday by the International Energy Agency (IEA), which estimates for the first time that world oil demand will peak before 2030, reports AFP.
“The transition to a clean energy economy is accelerating, hinting at a peak in global oil demand before the end of this decade as electric vehicles, energy efficiency and other technologies advance,” said IEA general manager, Fatih Birol, in a press release, according to Agerpres.
According to the new forecasts for the next five years, the Paris-based organization points out that even if total oil demand will continue to grow until 2028, the pace of growth will slow significantly towards the end of the forecast period, after which it is expected to reach the peak level of world oil demand.
“Based on current government policies and market trends, global oil demand will grow by 6% between 2022 and 2028 to reach 105.7 million barrels per day in 2028, supported by robust demand from sectors petrochemicals and aviation,” say the IEA experts. “However, annual demand growth will slow from a 2.4 million bpd advance this year to just a 400,000 bpd advance in 2028, suggesting a peak demand,” experts add.
Reaching this peak level will take place, according to the IEA, earlier than previously expected. In the previous ‘World Energy Outlook’ report, published in 2022, the IEA estimated that “world oil demand will recover, despite high prices, peaking and stabilizing around 2035”.
According to the IEA, the use of gasoline, the second most important oil product, will start to decline as early as 2023, and the use of oil as a transportation fuel is expected to decline after 2026. But this decline is expected to be slowed by demand in full having for petrochemical products, as well as the strong increase in oil consumption in emerging economies, which will largely counteract the decrease in demand in advanced economies.
“High energy prices and problems with security of supply highlighted by the global energy crisis, aggravated by the war in Ukraine, accelerate the transition to cleaner energy technologies,” the IEA points out.
As a result, OECD countries’ oil demand is likely to peak as early as this year, before starting to decline after 2024. In the medium term, strong sales of electric vehicles will make China’s oil demand growth rate to slow down in the last years of the forecast interval so that around 2027 India will become the main engine of growth in world oil demand.