Global Oil Demand Forecast 2023-2028: IEA Predicts Peak by End of Decade
The International Energy Agency forecasts that worldwide oil demand may reach its highest point by 2028, driven by shifts in energy consumption patterns and market dynamics.
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Highlights
- IEA projects global oil demand could peak by 2028.
- Accelerated transition to clean energy is reshaping oil consumption.
- Oil markets are adjusting post COVID-19 and geopolitical tensions.
The transition toward renewable and alternative energy sources is expected to slow oil demand growth significantly, potentially causing demand to plateau before the decade’s end.
According to the International Energy Agency's 2023 oil market report, global oil demand is anticipated to grow by 6% from 2022 to 2028, reaching approximately 105.7 million barrels per day, propelled by sectors like petrochemicals and aviation. However, annual demand growth is forecasted to decline sharply from 2.4 million barrels per day this year to just 0.4 million barrels per day by 2028, signaling an imminent peak.
IEA Executive Director Fatih Birol emphasized that the momentum toward a clean energy economy is accelerating rapidly. He urged oil companies to strategically adjust their investments to facilitate a smooth energy transition.
The agency also noted that global oil markets are gradually stabilizing following disruptions caused by the COVID-19 pandemic and the conflict in Ukraine. Despite potential supply constraints due to OPEC+ production cuts leading to tighter markets in the short term, these pressures are expected to ease in subsequent years.
China’s delayed lifting of pandemic restrictions resulted in a surge in oil demand earlier this year, but this growth is projected to slow significantly from next year onward. Meanwhile, rising consumption in emerging and developing economies is expected to offset demand declines in advanced economies.
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