The International Energy Agency estimates global oil demand to peak before the end of the decade, with Chinese consumption projected to decline following an initial pent-up recovery.
According to IEA’s latest Oil 2023 medium-term market report, global oil demand will peak before the end of this decade as a result of advancements in electric vehicles, energy efficiency, and other technologies.
Under present market and policy environments, the agency sees global oil demand to climb 6% from 2022 to 105.7 million barrels per day in 2028, driven by the petrochemical and aviation industries.
However, annual demand growth will slow from 2.4 million barrels per day in 2023 to 400,000 barrels per day in 2028.
The IEA also estimates that China’s pent-up demand will peak in mid-2023 after a 1.5 million barrels per day recovery, before dropping to an average of 290,000 barrels per day from 2024 to 2028.
The IEA expects non-OPEC+ oil producers, such as the US and other American producers, to “dominate medium-term capacity expansion plans.” IEA projects that global supply capacity would expand by 5.9 million barrels per day to 111 million by 2028, offset by a U.S. slowdown. Additionally, this will create a 4.1 million-barrel-per-day spare capacity buffer in OPEC giants Saudi Arabia and the UAE.
