Oil Demand Dips: IEA Predicts Global Oil Consumption to Decrease Post-2030
Global petroleum consumption forecasted to decreased from 2030, according to International Energy Agency (IEA) predictions.
Hop on, buckle up! The International Energy Agency (IEA) has some groundbreaking news for us: global oil demand is set to take a nosedive after 2030. In contrast to the spike we've seen since the 2020 COVID-19 pandemic, IEA forecasts a slight decrease in daily demand by 2030.
According to their recent oil market predictions, the demand growth, currently averaging about 700,000 barrels per day (bpd), will gradually slow down from 2025 onwards and fall in 2030. The worldwide oil demand will dip from 105.6 million bpd in 2029 to 105.5 million bpd in 2030.
The decrease is attributed to factors like slowing economic growth, growing trade tensions, the escalating popularity of electric vehicles, and the transition away from oil for power generation.
Oil-loving nations like the U.S. are expected to hit their peak demand for oil this year, with a decrease predicted by 2026. China, the biggest oil importer, is in the same boat, with demand projected to dip starting in 2028. The Middle East's peak demand is expected in 2027, followed by a downward trend.
Saudi Arabia is estimated to experience the "biggest demand decline" by 2030, as it switches to cleaner energy sources, such as gas and renewables, for power generation.
Just when you thought we were done with oil, the pandemic step-ins! With lockdowns and closed borders in 2020, oil demand plummeted to 91.7 million bpd. But since then, it's been on the rise.
Here's a sneak peek into the drivers responsible for this decline:
- The Accelerated Energy Transition: Electric vehicles are taking the world by storm, along with fuel efficiency improvements and the overall shift away from fossil fuels.
- Policy and Regulatory Changes: Governments worldwide are implementing tougher climate policies and carbon pricing regulations, encouraging oil reduction, especially in transportation and energy sectors.
- Technological Advancements: The surge in alternative energy technologies such as renewables and energy storage are putting oil under pressure in various markets.
Source: ntv.de, via AFP
[1] https://www.iea.org/[2] https://www.iea.org/reports/oil-market-report-2022#:~:text=Global%20oil%20demand%20is%20expected%20to,to%20begin%20to%20decline%20as%20these%20factors%20take%20greater%20effect.[3] https://www.iea.org/reports/global-energy-review-2022#:~:text=In%20response%20to%20the%20rise,oil%20demand%20is%20anticipated%20to%20plateau%20and%20begin%20to%20decline.
Communities may need to update their policy documents, particularly employment and industry policies, to reflect the anticipated decrease in global oil consumption post-2030, as the shift towards renewable energy sources might influence various sectors, including finance and energy.
Industries such as oil-and-gas, finance, and energy should closely monitor the IEA's oil market predictions and incorporate the accelerated energy transition, regulatory changes, and technological advancements into their strategic plans to remain competitive in the evolving global market.
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