The International Energy Agency (IEA) has released a new World Energy Outlook that presents a significant shift from its previous forecasts, projecting continuous growth in global oil demand through to 2050.

Revised Demand Projections

The IEA now expects global oil demand to rise to 113 million barrels per day by 2050. This contrasts sharply with the agency's 2024 edition, which had forecasted a peak in oil demand by 2030 and warned of a potential supply glut. The new scenario anticipates a 16% increase in oil and natural gas demand by 2035, with growth continuing through 2050, accompanied by rising prices throughout this period.

Drivers of Growth

Emerging economies, particularly India, are identified as the new primary drivers of this demand growth, taking over the role previously held by China. For natural gas, demand is projected to reach 5.6 trillion cubic metres by 2050, driven by customers in the Middle East and Asia. This increased demand is expected to be met by new infrastructure, including pipelines from Russia to China and a significant expansion in global liquefied natural gas (LNG) export capacity.

Supply and Infrastructure Requirements

To meet the projected demand levels, the IEA emphasizes that high levels of new resource development and new fossil fuel infrastructure are necessary. This includes upstream facilities, pipelines, export and import terminals, and ships. In the near term, oil markets are expected to remain well-supplied due to production from the US, Canada, Guyana, Brazil, and Argentina. The US is projected to remain the world's largest oil and gas producer through 2050, with Middle Eastern production also growing robustly.

LNG Market Expansion

The global LNG market is anticipated to expand substantially, growing from approximately 560 billion cubic metres (Bcm) in 2024 to 880 Bcm by 2035, and further to 1.02 trillion cubic metres (Tcm) by 2050. The US is forecasted to become the world's largest LNG exporter, with exports reaching 250 Bcm by 2035. The buildout of LNG projects is expected to ease gas market balances, though the IEA cautions that geopolitical risks and faster-than-expected demand growth could quickly erode existing market buffers.

Geopolitical Risks and Energy Security

The outlook highlights that geopolitical risks and energy security are key drivers of energy market dynamics. The IEA notes that energy security tensions currently apply to an unprecedented number of fuels and technologies simultaneously. It calls for governments to respond with the same focus demonstrated after the 1973 oil shock, emphasizing the need to consider the synergies and trade-offs between energy security and other policy goals, including affordability, access, competitiveness, and climate change.

This material is an AI-assisted summary based on publicly available sources and may contain inaccuracies. For the original and full details, please refer to the source link. Based on materials by Rebecca Conan. All rights to the original text and images remain with their respective rights holders.