"The end of the 'oil age' is accelerating? IEA: Global demand will peak, China will decouple early"

The International Energy Agency (IEA) said that China's oil demand will peak earlier than expected, reinforcing the outlook of global oil demand peaking in this decade and long-term oversupply of oil. Due to "exceptionally" strong sales of electric cars in China, the IEA significantly lowered its forecast for Petrochina's demand before 2030, by about 1 million barrels per day. The agency predicts that China's oil demand will peak in 2027, with global oil demand peaking two years later. Since the beginning of the century, China's oil demand has been a major driver of global oil demand growth. IEA Executive Director Fatih Birol stated that despite concerns about energy stocks due to conflicts between Israel and Iran, the "oil market looks well supplied in the coming years." The International Energy Agency was established in the 1970s to provide advice on energy policies. Last Friday, oil prices saw the largest increase in three years following Israeli airstrikes on Iran, a member of OPEC. However, the prices later fell back as oil exports were unaffected. On Monday, the price of US crude futures traded around $70 per barrel, down 19% from last year's peak, as the market expects an oversupply of oil. According to the IEA report, China's oil consumption will peak at 16.9 million barrels per day in 2027, about two years earlier than previously predicted. In addition to the rise of electric cars, high-speed railways and natural gas-powered trucks are also expected to replace oil. China's largest energy producer, Petrochina, predicted in December of last year that oil demand could peak as early as this year. The IEA predicts that global oil demand growth in the coming years will slow to a "trickle," reaching a peak consumption of 105.5 million barrels per day in 2029, which is consistent with last year's forecast. It is then expected to slightly decrease in the following year. The International Energy Agency predicts a decrease in demand for OPEC crude oil. With Petrochina demand growth slowing, global oil demand growth is expected to reach around 2.5 million barrels per day by 2030, mainly coming from India and other emerging economies. As enthusiasm for electric cars in the US cools, the upward revision of US oil demand forecasts is roughly equivalent to the downward revision of Petrochina demand forecasts. As China is no longer the center of oil demand growth, the importance of the US to global oil supply will also decrease. Over the past decade, the shale oil boom in the US has helped provide about 90% of oil supply growth. With falling oil prices, investment is slowing down. Birol said, "As we look back on the trends in the oil market over the past decade, we see extraordinary performances from China and the US. But these dynamics are changing." Nevertheless, US oil production will continue to grow, and oil production in Brazil, Canada, and Guyana will also increase. In this decade, global oil production capacity is expected to increase by about 5.1 million barrels per day, twice the rate of oil demand growth. Many major players in the energy industry expect oil demand to be stronger than the levels projected by the International Energy Agency. Some of the largest independent oil traders, such as Vitol Group, and Wall Street banks like JPMorgan, predict that oil demand will not peak until after 2030. Some of the IEA's other forecasts, such as the predicted decline in coal demand, have also not been met. On the other hand, the Organization of the Petroleum Exporting Countries (OPEC) forecasts that oil demand will continue to grow at least until the middle of this century, but the organization's previous short-term outlook has been overly optimistic and has since been revised. Despite the OPEC+ alliance, led by Saudi Arabia, starting to increase production in recent months after a pause of several years, the IEA believes that demand for this additional oil will be limited as competitors expand their production. The report states, "OPEC+ may struggle to regain significant market share."