By 2030, a major supply surplus is expected, and Big Oil is receiving a stark warning.

• The IEA stated in its Oil 2024 report that oil demand growth is expected to slow down before reaching its peak of approximately 106 million barrels per day by 2030.
• The IEA anticipates that total oil production capacity will increase to approximately 114 million barrels per day by 2030, which is 8 million barrels per day above the projected global demand.
• It warned these dynamics could have "significant consequences" for oil markets.

According to the International Energy Agency, a surge in global oil production, led by the US, is predicted to exceed demand growth over the next ten years. This could result in an unprecedented level of spare capacity and potentially disrupt OPEC+ market management.

IEA Executive Director Fatih Birol issued a stern warning to Big Oil, suggesting that the world's largest energy majors should align their business strategies with the changes taking place.

The global energy watchdog predicts that oil demand growth will slow down and reach its peak of approximately 106 million barrels per day by 2030, up from 102 million barrels per day in 2023, according to its latest medium-term market report titled Oil 2024.

The IEA anticipates that total oil production capacity will increase to approximately 114 million barrels per day by 2030, which is 8 million barrels per day above the projected global demand.

According to the IEA, this would lead to unprecedented levels of spare capacity, except during the Covid-19 lockdowns in 2020.

The warning stated that these dynamics could result in "significant consequences" for oil markets, particularly affecting the U.S. shale industry and economies of OPEC and other countries.

The IEA's Birol stated that as the pandemic's resurgence slows, clean energy transitions progress, and China's economy structure shifts, global oil demand growth is slowing down and will peak by 2030.

The report's projections, based on the latest data, indicate a major supply surplus emerging this decade, which means oil companies should prepare their business strategies and plans for the changes taking place.

The report emerges as countries strive to shift away from fossil fuels, with growing support for clean and energy-efficient technologies. The primary contributor to the climate crisis is the combustion of fossil fuels, including coal, oil, and gas.

For decades, the global energy supply has relied heavily on fossil fuels, accounting for about 80%, according to the IEA. However, this is expected to change by 2030, with the share of fossil fuels falling to approximately 73%.

Oil demand in advanced economies to fall further

Although the IEA predicts a slowdown in oil demand growth, it expects crude demand to remain around 3.2 million barrels per day higher by 2030 than in 2023 without stronger policy measures or behavioral changes.

The growth is mainly due to strong demand from rapidly expanding economies in Asia, as well as the aviation and petrochemical industries.

In advanced economies, the IEA predicts that oil demand will decrease to 43 million barrels per day by 2030, a drop of 3 million barrels from last year's 46 million barrels per day. This decline, according to the IEA, is due to factors other than the coronavirus pandemic, with the last time oil demand from advanced economies was this low being in 1991.

The IEA advised against new oil, gas, or coal developments in a landmark 2021 report to achieve net zero by 2050.

Several OPEC+ producers criticized the report's findings, advocating for dual investment in hydrocarbons and renewables until green energy can meet global consumption needs.

An energy alliance known as OPEC+, comprised of OPEC and non-OPEC partners, is led by Saudi Arabia.