The International Energy Agency (IEA) has announced that global oil demand is expected to continue growing until the end of this decade, even as China is likely to reach its peak demand by 2027.
The IEA’s latest Oil 2025 report suggests a sustained increase in oil consumption, driven by factors such as lower gasoline prices and a slower-than-anticipated transition to electric vehicles (EVs) in the US.
According to the report, global oil demand is set to rise by 2.5 million barrels per day (mbbl/d) between 2024 and 2030, reaching a plateau of around 105.5mbbl/d by the end of the decade.
This growth comes despite contrasting views from OPEC, which anticipates consumption will expand for a more extended period.
The report also highlighted that global oil production capacity is expected to exceed demand, increasing by more than 5mbbl/d to reach 114.7mbbl/d by 2030.
The unwinding of production cuts by the OPEC+ alliance, which includes OPEC countries, Russia and other allies, is reshaping supply projections.
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By GlobalDataThe IEA report highlights that increased oil output from the US, Canada, Brazil, Guyana and Argentina will likely cover the anticipated demand growth in the coming years.
IEA executive director Fatih Birol said: “Based on the fundamentals, oil markets look set to be well-supplied in the years ahead – but recent events sharply highlight the significant geopolitical risks to oil supply security.
“When it comes to energy security, there is no room for complacency. The IEA remains deeply committed to working with energy producers and consumers to safeguard energy security.”
The report also highlighted the various trends impacting the global oil market, including the predicted peak in China’s oil consumption in 2027 due to a boom in EV sales and investments in alternative transport methods such as high-speed rail and natural gas-powered trucks.
This marks a significant shift for a country that has been a primary driver of oil demand growth for more than a decade.
The IEA now estimates that China’s oil consumption in 2030 will only be marginally higher than in 2024, in stark contrast to the growth of around 1mbbl/d forecasted in last year’s report.
In contrast, the US is expected to see higher oil demand by 2030, with an increase of 1.1mbbl/d from previous predictions.
This is partly due to a revised expectation that EVs will make up 20% of total US car sales by 2030, down from the previous estimate of 55%.
The report also highlighted that the recent tensions between Israel and Iran have underscored the vulnerability of Middle East oil supplies.
Last month, the IEA projected global oil demand in 2025 will increase by 720,000 barrels per day.
