World oil markets are facing a “major” surplus this decade because the abandonment of fossil fuels leads to a flattening of demand, against the backdrop of abundant supply growth, according to a report by the International Energy Agency (IEA), Bloomberg reports.
Global consumption will “slow” to 105.6 million barrels per day (bpd) in 2029, about 4% higher than in 2023, amid increased sales of electric vehicles (EVs) and improvements in energy efficiency, informed the Paris-based organization.
Meanwhile, crude oil production continues to increase, especially in the USA, according to Agerpres.
“After the recovery from the pandemic, the transition to green energy is advancing, the structure of the Chinese economy is changing, and the growth of global oil demand is slowing down. The increase in oil supply could potentially affect prices until the end of the decade,” said Fatih Birol , the director general of the IEA.
On the ICE Futures exchange, the price of a barrel of Brent oil from the North Sea is around 80 dollars. In recent days, the price of crude oil has been falling, against the background of the fragile economic outlook in China, an important consumer, and uncertainties regarding the pace of interest rate cuts in the main world economies.
Global oil consumption will continue to grow in the coming years, adding four million barrels per day by the end of the decade, on the back of economic expansion in India and China, and increased consumption in the aviation and petrochemical industries. But fossil fuel use will continue the “downward trend of the last decade” in developed economies, falling from 46 million barrels per day in 2023 to 43 million barrels per day by 2030, the lowest level since 1991. Even demand from China will slow to about 18 million barrels per day, according to the report.
“Oil companies should make sure they have business plans and strategies ready,” said Birol.
The IEA revised down its forecast for consumption this year by 100,000 bpd to 960,000 bpd. One of the risks to the IEA forecasts is a slower-than-expected slowdown in the transition to clean energy.