The International Energy Agency (IEA) has projected that global oil consumption will continue to grow through the latter part of this decade, reaching its zenith around 2029, even as China—the world’s largest oil importer—is expected to hit peak demand by 2027.
This forecast reflects the ongoing appeal of affordable gasoline and the gradual pace of electric vehicle adoption in the United States, which continues to drive consumption patterns.
In its latest assessment, the Paris-based organisation maintained its earlier projection of peak demand in 2029, while adjusting its timeline for China’s consumption plateau due to the country’s rapid expansion of electric vehicles.
This outlook stands in stark contrast to projections from the Organisation of the Petroleum Exporting Countries (OPEC), which anticipates continued growth in oil consumption without identifying any peak period.
According to the IEA’s annual analysis, global petroleum demand is projected to reach its maximum at 105.6 million barrels per day by 2029, followed by a modest decline in 2030. Meanwhile, worldwide production capabilities are anticipated to expand by over 5 million barrels per day, reaching 114.7 million barrels per day by 2030.
Recent tensions involving Israel and Iran have underscored vulnerabilities in Middle Eastern supply chains, contributing to a 5% increase in oil prices to above $74 per barrel on Friday. However, the agency’s projections indicate sufficient supply through 2030, assuming there are no major disruptions.
“Based on the fundamentals, oil markets look set to be well-supplied in the years ahead,” said IEA Executive Director Fatih Birol in a statement. “But recent events sharply highlight the significant geopolitical risks to oil supply security,” Birol added.
In a concurrent analysis addressing the market implications of the Israel-Iran tensions, the IEA noted that global markets appear adequately supplied for the current year, barring major disruptions, as supply growth outpaces demand increases.
The agency forecasts global demand will expand by 720,000 barrels per day this year, representing a downward revision of 20,000 barrels from the previous month’s estimate. Supply is expected to grow by 1.8 million barrels per day, an upward adjustment of 200,000 barrels from earlier projections, partially attributed to increased OPEC+ production.
China’s role as the primary driver of global oil demand growth over recent decades is diminishing as the nation faces economic headwinds while accelerating its transition to electric vehicles.
The world’s second-largest economy is anticipated to reach peak oil consumption in 2027, driven by surging electric vehicle sales and expanded deployment of high-speed rail systems and natural gas-powered trucks. Earlier this year, the IEA suggested that China’s demand for transportation fuels may have already peaked.
The agency now projects that China’s total oil consumption in 2030 will show only marginal growth compared to 2024 levels, a significant reduction from the approximately one-million-barrel-per-day increase projected in last year’s assessment.
Conversely, the United States—the world’s largest oil consumer—has seen its 2030 demand forecast increase by 1.1 million barrels per day compared to previous estimates, reflecting lower gasoline costs and a more gradual electric vehicle adoption rate.
The report now anticipates electric vehicles will represent 20% of total U.S. automobile sales by 2030, down substantially from the 55% share assumed in last year’s analysis.
Following his return to the presidency, Donald Trump has called for OPEC to reduce oil prices and has implemented policies targeting electric vehicle adoption, including support for congressional resolutions that block California’s electric vehicle sales requirements.
