The global oil demand growth will significantly slow down in the coming years.
That’s according to a new report by the International Energy Agency (IEA), which suggests concerns about high oil prices and energy security, coupled with the ongoing global energy crisis, are driving the shift towards cleaner energy technologies.
According to the IEA’s Oil 2023 medium-term market report, global oil demand is projected to rise by 6% between 2022 and 2028, reaching 105.7 million barrels per day.
However, annual demand growth is expected to shrink from 2.4 million barrels per day this year to just 0.4 million barrels per day by 2028, indicating an approaching peak in demand.
The decline in oil demand for transportation fuels is a significant contributing factor to this trend.
The report predicts a decrease in oil consumption for transport after 2026, as electric vehicles become more widespread, biofuels gain popularity and fuel efficiency improves.
IEA Executive Director Fatih Birol, commenting on the report, stated, “The shift to a clean energy economy is picking up pace, with a peak in global oil demand in sight before the end of this decade as electric vehicles, energy efficiency and other technologies advance.
“Oil producers need to pay careful attention to the gathering pace of change and calibrate their investment decisions to ensure an orderly transition.”