Global oil and gas demand is expected to continue increasing until 2050, as per the latest report from the International Energy Agency (IEA). This forecast diverges from previous expectations of a rapid shift towards cleaner energy sources, following criticism from the U.S. regarding the IEA’s climate change focus.
The IEA’s annual outlook also projects that the world is unlikely to achieve its target of limiting the global temperature increase to 1.5 degrees Celsius above pre-industrial levels to mitigate the most severe impacts of climate change. The agency has faced pressure from the U.S. to prioritize clean energy policies, especially during the Trump administration, which advocated for expanding oil and gas production.
Under the current policies scenario outlined in the IEA’s World Energy Outlook, global oil demand is anticipated to reach 113 million barrels per day by mid-century, representing a 13% increase from 2024 levels. The report also forecasts a 15% rise in global energy demand by 2035, equivalent to 90 exajoules.
Notably, the IEA has reverted to using a scenario based on existing government policies rather than one aligned with a clean energy transition, emphasizing the diversity of energy choices made by governments worldwide. This shift follows criticisms from the U.S., particularly from Energy Secretary Chris Wright, who dismissed the IEA’s peak oil demand projections as “nonsensical.”
While the report acknowledges significant progress in renewable energy and energy efficiency globally, it underscores the need for a more rapid phase-out of fossil fuels to achieve climate objectives. Despite advancements in renewables, fossil fuel consumption continues to outpace clean energy growth, posing a challenge to meeting climate goals.
Moreover, the IEA highlighted a surge in investment decisions for new liquefied natural gas (LNG) projects, with approximately 300 billion cubic meters of new annual LNG export capacity expected to come online by 2030. This expansion is projected to drive the global LNG market from 560 bcm in 2024 to 880 bcm in 2035 and 1,020 bcm in 2050, primarily fueled by increasing demand from the power sector, including data centers and artificial intelligence applications.
The report also emphasizes the need for substantial investments in data centers, with global spending expected to reach $580 billion in 2025, surpassing annual global expenditures on oil supply. Additionally, the IEA report outlines a scenario detailing a pathway to achieving net-zero global energy emissions by 2050, aligning with the commitments made by over 190 countries at the 2015 Paris climate conference to limit global warming to 1.5 degrees Celsius.
In conclusion, the IEA’s latest outlook underscores the continued dominance of fossil fuels in the global energy landscape while emphasizing the imperative for accelerated transitions to cleaner energy sources to address climate change effectively.
