London:
Growth in global oil demand is set to slow significantly by 2028, with a peak in demand in sight before the end of the decade, local media reported.
That’s the verdict from the International Energy Agency (IEA), in a new ‘medium-term report’.
It predicts that the use of oil for transport will go into decline after 2026, due to increased take-up of electric vehicles, the growth of biofuels and improving fuel economy reduce consumption.
Overall consumption is expected to be supported by strong petrochemicals demand, though, the IEA adds.
It forecasts that growth in the world’s demand for oil is “set to slow almost to a halt in the coming years”. High prices, and concerns about security of supply following Russia’s invasion of Ukraine, will speed the shift towards cleaner energy technologies, they say.
The IEA predicts that global oil demand will rise by 6 per cent between 2022 and 2028 to reach 105.7 million barrels per day (mb/d), due to “robust demand” from the petrochemical and aviation sectors.
But annual demand growth is expected to shrivel from 2.4 million barrels per day this year, to just 0.4 mb/d in 2028, putting “a peak in demand in sight”.
The report also predicts that demand growth in China is forecast to slows markedly from 2024 onwards, as the rebound in demand after the pandemic fades.
IEA executive director Fatih Birol says, “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,” said.
Birol adds that oil producers need to pay “careful attention to the gathering pace of change” and calibrate their investment decisions accordingly, to “ensure an orderly transition”.