IEA says global oil demand may keep rising until 2050

The world might be able to manage a record wave of new liquefied natural gas production. But a lot depends on how governments handle clean energy targets and whether renewable sources expand, according to a new assessment from the International Energy Agency.

In its World Energy Outlook published Wednesday, the IEA bumped up its overall gas consumption projections. Still, there are questions about where all this new LNG will actually go. Export facilities worldwide are set to grow by roughly 50% before the decade ends. That’s the biggest expansion the industry has ever seen. Companies and market watchers are trying to figure out how bad the oversupply could get and how long it might last.

The agency looked at several different scenarios based on how fast energy transitions and climate goals move forward. The most bullish outlook for gas demand shows worldwide LNG appetite rising right alongside supply through the end of the decade.

It could even slightly exceed already planned export capacities by 2035. But another projection that accounts for stronger renewable growth sees LNG oversupply in 2030. That surplus would only clear up by 2035.

This period of excess creates risks for companies investing in new projects. American suppliers have the most to lose since the country is the most flexible supplier and will add most of the new capacity, the report says. Older plants with relatively high operating costs elsewhere may not be able to compete.

China is another wild card. The country has deepening energy ties with Russia, a major pipeline gas supplier. And there’s uncertainty about China’s LNG demand going forward, the IEA noted.

IEA abandons peak oil forecasts, projects growth through 2050

The agency also changed course from its earlier predictions. It said worldwide oil and gas consumption could keep rising until 2050. That’s a departure from previous expectations of a speedy transition to cleaner fuels. It also predicts the world will likely fail to achieve climate goals.

The organization serves as the West’s energy security watchdog. It’s been under pressure from the U.S. in recent years for a shift toward focusing on clean energy policies. President Donald Trump has called on American companies to further expand oil and gas production.

Under the Joe Biden administration, the IEA predicted that global oil demand would peak this decade. It said no more investment in oil and gas was needed if the world wanted to achieve its climate target.

Trump’s Energy Secretary Chris Wright has called the IEA’s demand peak projections “nonsensical.” The IEA is funded by member countries. The U.S. is the largest contributor. Its analysis and data underpin energy policies of governments and companies around the world.

Current policies framework shows oil demand climbing 13% by mid-century

In its annual World Energy Outlook published Wednesday, the IEA predicted under a current policies scenario that oil demand will hit 113 million barrels per day by mid-century. That’s up around 13% from 2024 consumption.

It predicted that global energy demand will climb by 90 exajoules by 2035. That’s a 15% increase from present levels.

The current policies scenario takes into account existing government policies. Not aspirations to achieve climate goals.

The IEA last used the current policies scenario for its predictions in 2019. It switched to predictions more in line with a clean energy transition and pledges of reaching net zero emissions by mid-century from 2020. This year’s outlook ditched the pledges scenario.

The IEA said it had planned to assess new country climate targets covering 2031-2035. But not enough countries submitted these plans to produce a meaningful picture. In the IEA’s stated policies scenario, which considers policies that have been put forward but not necessarily adopted, oil demand peaks around 2030.

The IEA says its scenarios explore a range of possible outcomes under various sets of assumptions. They are not forecasts.

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