LONDON (Bloomberg) -- Global oil demand growth will taper off over the next few years as high prices and Russia-Ukraine war speed up the transition away from fossil fuels, the International Energy Agency said.
Consumption in 2024 will grow at half the rate seen in the prior two years, and an ultimate limit for demand will arrive this decade as electric vehicles send the use of gasoline by cars into decline, the Paris-based IEA predicted in a medium-term outlook. With production capacity still growing, markets will remain “adequately supplied” through to 2028, it said.
“Growth in the world’s demand for oil is set to slow almost to a halt in the coming years,” said the agency, which advises major economies. “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.”
Consuming nations have for years been engaged in a shift away from fossil fuels in order to limit emissions of greenhouse gases and avert catastrophic climate change. That ambition that was fortified when oil and gas prices soared after Russia attacked its neighbor in early 2022.
The short-term and long-term outlooks differ greatly. World oil markets may tighten “significantly” over the next few months as China’s fuel consumption rebounds from the pandemic, while OPEC+ producers led by Saudi Arabia reduce production, the agency said. Oil is trading near $75 a barrel in London.