As electric vehicles become more popular, the International Energy Agency (IEA) predicts for the first time that global oil demand will peak in the current decade. The projected peak does not mean that fossil fuel consumption will fall rapidly immediately. The IEA said that after the peak, there may be "multi-year high hovering", with demand still high and unable to control global warming to less than 1.5 degrees Celsius.
According to the IEA's annual World Energy Outlook released on Tuesday, under the baseline scenario, global daily crude oil consumption will top out at 102 million barrels by the end of the 2020s and drop to 97 million barrels by the middle of this century.
IEA Director Fatih Birol said in the announcement that the world is transitioning to clean energy and it is unstoppable. “The argument that oil and gas represents a safe or reliable option for the world’s energy and climate future appears to be weaker than before.
The IEA said that oil demand from the petrochemical, aviation and shipping industries will continue to grow until 2050, but given the staggering growth in electric vehicle sales, it will not be enough to offset the decline in demand from the automotive transport sector.
Global oil consumption will follow the same path as demand for other hydrocarbons. "We are expected to see all fossil fuel demand peaking before 2030," the IEA said. This is the first time that all of the agency's scenarios for the global energy market outlook point to a short-term decline in hydrocarbon consumption.
The IEA's baseline scenario reflects the energy policies currently being pursued by governments around the world, as well as the ongoing impact of last year's energy crisis. The IEA's second scenario, which assumes all governments fully meet their energy and climate commitments on time, predicts global oil demand will peak at 93 million barrels per day in 2030 and fall to 55 million barrels per day by 2050. The third scenario is that in a net-zero emissions scenario where global warming is limited to 1.5 degrees Celsius, global demand will fall to 77 million barrels per day in 2030 and just below 25 million barrels per day in 2050.