The International Energy Agency (IEA) anticipates a major surplus on oil markets by 2030, in its annual report, published on Wednesday.
The agency attributes the surplus to stabilised demand combined with a surge in global production.
A notable increase in renewable energy and energy efficiency, coupled with an accelerated production of electric cars, are cited as contributing factors. The report highlights that these advances will cause global oil demand to decelerate in the near future.
Based on current policies and market trends, the IEA forecasts an increase in oil consumption in the forthcoming years, particularly in rapidly growing Asian economies and sectors such as aviation and petrochemicals.
However, the report asserts that these gains will increasingly be offset due to factors such as growth in electric car sales, improved energy efficiency of conventional vehicles, reduced use of oil to produce energy, and structural economic changes.
The IEA anticipates that global demand for oil, including biofuels, will stabilise at around 106 million barrels per day (bd) by the end of the decade, compared to just over 102 million bd in 2023. This growth of less than 4% will be driven by emerging Asian economies, especially China and India, while demand decreases in advanced economies.
At the same time, the IEA explains that global oil production is set to increase. This growth will ease market tensions and push additional production capacity to levels unprecedented outside the Covid-19 crisis in 2020.
Global black gold supply is anticipated to exceed demand as early as 2025, due to the influence of non-OPEC+ producers, particularly the United States.
Total supply capacity is projected to reach approximately 114 million bd by 2030, surpassing the estimated global demand by 8 million bd.
This production surplus could pave the way for lower oil price conditions, the IEA notes.
Against this background, IEA Director General Fatih Birol has advised oil companies to prepare their business strategies and plans for the ongoing changes, according to a press release from the IEA.
