The International Energy Agency (IEA) anticipates a significant shift in the global oil market by the end of this decade, with a report released Wednesday projecting a ‘major surplus’ in oil supplies by 2030. According to the IEA, global oil demand is expected to peak in 2029, reaching approximately 106 million barrels per day, before stabilizing due to the accelerating transition to clean energy and the widespread adoption of electric vehicles . This stabilization represents a modest increase from 2023’s level of 102 million barrels per day.However, oil production capacity is projected to grow to 114 million barrels per day by 2030, resulting in an excess supply of 8 million barrels per day. This surplus, a level only seen during the COVID-19 crisis, is anticipated to be driven by non-OPEC+ producers, particularly the United States. The IEA’s Executive Director, Fatih Birol, has advised oil companies to prepare for these changes, suggesting that current business strategies may need to be realigned with the evolving market landscape.The IEA’s forecast contrasts with OPEC’s more optimistic outlook, which predicts continued strong global oil demand, particularly for transportation and air travel. Despite this, the IEA has called for a halt to new oil and gas projects to meet the goal of net-zero carbon emissions by 2050. The impending surplus presents a considerable challenge for oil markets, including producer economies within and outside OPEC, as well as the American shale industry.
Key points
- The IEA predicts global oil demand to peak in 2029, with a surplus of 8 million barrels per day by 2030.
- Increased oil production, particularly from non-OPEC+ countries like the US, is expected to drive the surplus.
- The transition to electric vehicles and improved fuel efficiency are key factors in the stabilization of oil demand.
- Oil companies are advised to revise their business strategies in light of the anticipated market changes.
