The global economy is still going strong wool and the demand for it will continue to grow. However, supply will also follow the increase and indeed at a rate faster than consumption, warns major oil producing countries and companies, the International Energy Agency (IEA).
The Service calculates that demand growth will be slower than supply from this year through the end of the decade. If this is confirmed then we will see the market flooded with a large oversupply and the prices will decrease significantly, in a development that will raise serious challenges for OPEC+. Saudi Arabia has realized this, continuing its steps to diversify its economy, even though it is still dependent on the petrodollars flowing into its coffers.
In its recent medium-term outlook report, the IEA predicts that demand will continue to grow, but at a much slower pace, eventually rising. to 106 million barrels per day in 2030 from 102 million barrels per day in 2023.
A surplus of 8 million barrels per day by 2030
At the same time it is calculated that the total supply of oil jump to 114 million barrels per day by 2030, mainly due to the increase in US shale oil production. So that in 2030 the surplus will reach 8 million barrels per day – the highest level ever recorded, except for 2020, when the invasion of Covid-19 in our lifetime puts the whole planet in “quarantine” and has- transports froze.
“As the pandemic recovers, the clean energy transition progresses and China’s economic structure changes, the growth of global oil demand is slow and is set to increase in 2030,” said IEA chief Fatih Birol. “The projections in this report, based on the latest data, show a significant oversupply occurring this decade, suggesting that oil companies may want to ensure that their business strategies and plans ready for the changes that are happening”, he added.
The report comes as countries seek to move away from fossil fuels to tackle the climate crisis. Of course, the share of fossil fuels in the global energy supply it has remained close to 80% for decades. By 2030, according to IEA calculations, it will have decreased to 73%.
Back to …1991 for consumption in advanced economies
In advanced economies, the IEA estimates that oil demand which will fall below 43 million barrels per day by 2030, up from nearly 46 million barrels per day last year. Except during the pandemic, the consumption of oil in advanced economies should be found in large quantities lowest level since 1991.
In a landmark report in 2021, the IEA called for them not to expand new oil, natural gas or coal projectsif the world wants to achieve zero emissions by 2050.
The findings of that report have been widely criticized by several OPEC+ producers, who support double investment in hydrocarbons and renewables until green energy unilaterally meets the needs of world consumption.