Oil Demand Dive: IEA Predicts Global Oil Consumption Decline by 2030
Global oil consumption anticipated to lessen starting from 2030, according to IEA predictions.
Get ready to pump the brakes, folks! The International Energy Agency (IEA) has dropped a bombshell that might just turn the oil industry on its head. In a surprising forecast, the IEA predicts global oil demand to nosedive for the first time since the COVID-19 pandemic in 2030 [2][1].
According to the IEA, the daily demand, currently hovering around 700,000 barrels per day (bpd), is set to slow down starting from 2025 and 2026, reaching a low in 2030 [2]. Overall, demand is projected to drop from 105.6 million bpd in 2029 to 105.5 million bpd in 2030 [2].
So, what's causing this seismic shift? Turns out it's a perfect storm of factors [2][1]. Here are the big players:
- Economic Slump: Slowing economic growth and global trade tensions are dampening the thirst for oil around the world.
- Rise of Electric Vehicles: The increased adoption of EVs, improved fuel economy, and the rise of renewable energy sources are eating into oil consumption, especially in advanced economies and China.
- Demand Shifts: The transportation sector is witnessing a significant shift away from oil, with electrification accelerating. Petrochemical feedstocks and industrial uses are also seeing slower growth as recycling and alternative materials gain traction.
Major oil consumers are bracing themselves for the change. The U.S., the world's largest oil consumer, is expected to experience a peak in demand this year, followed by a decline from 2026 onwards [2]. China, the world's largest crude oil importer, is predicted to feel the pinch from 2028 [2]. Even the Middle East, a traditional oil powerhouse, is projected to peak in its demand for oil in 2027, setting the stage for a decline in the following years [2].
In a peculiar twist, Saudi Arabia is expected to witness the "largest absolute decline in oil demand" by 2030 as it replaces oil with gas and renewable energy for power generation [2]. Remember, oil demand plummeted due to the COVID-19 pandemic in 2020, falling to 91.7 million bpd per day [2]. Since then, it has gradually rebounded. But the IEA's prediction of a steady decline by 2030 signals a new era in global energy consumption.
Source: ntv.de, AFP
[1]International Energy Agency (IEA), Retrieved from https://www.iea.org/[2] EIA, Retrieved from https://www.eia.gov/
In the face of this impending global oil consumption decline, various community and employment policies may need to adapt to accommodate the shifting oil industry. For instance, employment policies may need to cater to workers transitioning from oil-and-gas industries to finance or renewable energy sectors. Furthermore, as the oil industry takes a downward turn, investment and finance policies may need to consider the decreased demand and associated economic impact across different industries, including energy and industry.
