A worker inspects an outdoor gas pipe at an underground gas storage facility operated by Gas Storage CZ AS in Hacě, Czech Republic, Friday, January 3, 2025.
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The International Energy Agency’s latest outlook suggests oil demand could continue to rise until mid-century, reflecting a sharp shift in tone at the world’s energy watchdog and raising further questions about the future of fossil fuels.
The Paris-based agency on Wednesday laid out a scenario in its flagship World Energy Outlook in which oil demand reaches 113 million barrels a day by 2050, a 13% increase from 2024 levels.
The IEA previously predicted global fossil fuel demand would peak by the end of this year and said there must be no new investment in coal, oil and gas projects to reach net-zero emissions by 2050.
The concept of peak oil refers to the point at which global crude oil production reaches its highest point before entering an irreversible decline.
The IEA’s forecast for peak oil at the end of 2010 began a long war of words with OPEC, a group of influential oil exporting countries that accused the agency of fear-mongering and risking destabilization of the global economy. Meanwhile, US Energy Secretary Chris Wright slammed the IEA’s peak oil demand assumptions as “nonsense”.
The IEA’s latest projections for oil demand growth were outlined in the Current Policy Scenario, one of a number of scenarios outlined by the agency. This assumes there are no new policies or regulations beyond those already in place.
CPS was abolished five years ago amid energy market turmoil caused by the coronavirus pandemic, but was reintroduced under pressure from the Trump administration.
Earlier this month, the IEA said “there is merit in revisiting the CPS” now that the world has overcome the pandemic and global energy crisis.
The agency said the increase in oil demand will be primarily driven by slower growth in electric vehicles, as well as demand for petrochemicals and jet fuel.
Gregory Belew, an analyst in Eurasia Group’s energy, climate and resources team, said the IEA’s withdrawal from peak oil demand represented a “major change” from the group’s position over the past five years.
“The justification for the shift includes policy changes in the U.S. where slower adoption of EVs means oil (consumption) is more robust, but this is also tied to expected increases in petrochemical and aviation fuels in East and Southeast Asia,” Belew told CNBC in an email.
“While the agency is unlikely to be making adjustments based on political pressure, such as the Trump administration’s criticism of the group’s perceived bias toward renewable energy, the change reflects widespread skepticism that oil demand will soon reach its peak,” it added.
Is this the wrong idea?
OPEC welcomed what it called the IEA’s “confluence with reality” as tensions between the energy industry’s two biggest players apparently eased.
“We hope that the IEA’s World Energy Outlook marks a return to the fold of analysis based on energy reality, and that we have moved past the peak of the false concept of ‘peak oil,'” OPEC said in a statement on its website.
In parallel to the CPS, the IEA also presented projections based on so-called “defined policy scenarios” (STEPS), which reflect the general direction of the global energy system.
Based on this assumption, the IEA said it expects oil demand to peak at 102 million barrels per day around 2030 and then gradually decline. In this scenario, global electric vehicle sales are much stronger compared to CPS.
The IEA said the scenarios explored different outcomes of different policy choices and should not be considered predictions.
International Energy Agency (IEA) Director-General Fatih Birol attends the World Nuclear Exhibition (WNE) conference in Paris, France, on Tuesday, November 4, 2025. The conference will bring together key figures from the international nuclear sector from November 4th to 6th.
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Grant Hauber, an energy analyst at the Institute for Energy Economics and Financial Analysis (IEEFA), said the IEA’s CPS appears to be a “capitulation” scenario for the U.S. administration, which sees some flattening of current energy market trends.
“This could lead to the dawn of largely spurious LNG demand and encourage those investing in the US LNG export boom. CPS will ‘create’ enough global LNG demand to justify ramp-up through 2035,” Hauber said.
“But you only need to look at the STEPS scenario to see how fragile that outlook is. The match between supply and demand evaporates quickly in the same time frame, leading to an LNG surplus. This happens even if STEPS adds renewable energy, efficiency and electrification measures more slowly,” he added.
climate crisis
In all IEA scenarios, the energy watchdog predicted global temperatures would rise by more than 1.5 degrees Celsius.
Scientists have repeatedly warned that average global temperatures must not rise more than 1.5 degrees Celsius to avoid the worst of the climate crisis.
This threshold is recognized as an important long-term goal, as a tipping point is more likely to occur above this threshold. Tipping points can cause dramatic and even irreversible changes to some of Earth’s largest systems.
Extreme temperatures are being accelerated by the climate crisis, primarily caused by the burning of fossil fuels.
Lars Nitter Habro, head of energy macro at Rystad Energy, said the IEA’s reintroduction of CPS represented a “change in tone” but should not necessarily be seen as a “massive reversal” of peak oil.
