Growth in global demand for oil is falling quicker than previously expected as economies switch to clean energy — and is on track to drop by half next year before peaking altogether in 2028, according to the International Energy Agency.
Barrel needs are projected to nosedive from 2.5 million a day in 2023 to 860,000 next year — and then to a tepid 400,000 in 2028, the agency told Bloomberg.
The same year, the agency sees the need for combustible fossil fuels hitting an absolute peak of 81.6 million barrels a day, the outlet reported.
A long-term projection published by the IEA in November sees oil demands leveling off in the 2030s.
As the world becomes less dependent on hydrocarbons, oil demand in 2024 will fall to half the rate seen in the past two years.
The US has gotten a head start on its move away from fossil fuels, which was prompted by high gas prices and Russia’s invasion of Ukraine.
that would require more than two-thirds of vehicle models from the 2027 to 2032 years to be electric — about 10 times the number currently sold in the US.
America’s proposed restrictions for cars and trucks, announced by the Environmental Protection Agency in April, would be the strictest ever imposed on US automakers.
The White House said the changes would cut carbon dioxide emissions by 10 billion tons, reduce the nation’s reliance on imported oil and save Americans about $12,000 over the life of a vehicle.
The Paris-based agency predicted the true limit for oil demand will be determined by the end of this decade as electric vehicles — which send the need for gasoline in cars plummeting — are still on the rise.
However, the IEA told Bloomberg that the global market will likely remain “adequately supplied” through 2028.
“Growth in the world’s demand for oil is set to slow almost to a halt in the coming years,” the agency said, according to the outlet. “The shift to a clean energy economy is picking up pace, with a peak in global oil demand in sight before the end of this decade.”
According to the Bureau of Labor Statics’ Consumer Price Index report released Tuesday, gas prices in the US are lowering as .
The volatile energy index fell 3.6% in May, while the gasoline index dropped 5.6% following a 3.0% increase the month prior.
Looking global, the IEA predicted oil markets could tighten “significantly” over the next few months as China’s fuel consumption rebounds from COVID and Saudi Arabia-led OPEC+ producers reduce manufacture, Bloomberg reported.