“IEA: Global Oil Demand to Keep Rising This Decade Despite China’s 2027 Peak, Supply Glut Expected by 2029”

Key Points

Research suggests global oil demand will likely grow until 2029, peaking at 105.6 million barrels per day, despite China’s oil consumption peaking in 2027.
The evidence leans toward slower electric vehicle adoption in the US and cheaper gasoline supporting continued global demand growth.
There is controversy, as OPEC predicts ongoing oil demand growth, contrasting with the IEA’s forecast of a peak this decade.

Overview

The International Energy Agency (IEA) has provided insights into global oil demand trends, indicating that despite a peak in China’s oil consumption by 2027, global demand is expected to continue rising until around 2029. This growth is driven by factors such as slower electric vehicle (EV) adoption in the US and lower gasoline prices, which bolster oil use in other regions. However, there is a notable debate, with OPEC holding a different view, expecting sustained demand growth beyond this decade.

Detailed Analysis

The IEA’s projections, based on their latest annual report, suggest a complex global energy landscape where regional peaks, like China’s in 2027, do not immediately halt overall demand growth. This is particularly influenced by emerging economies and sectors like petrochemicals and aviation, which continue to drive consumption. The slower shift to EVs in the US and economic factors like cheaper gasoline are seen as key supports for this trend.

Global Demand Growth and Peak Projections

The IEA’s analysis, as reported by Reuters on June 17, 2025, indicates that global oil demand will maintain an upward trajectory, supported by factors such as cheaper gasoline and slower adoption rates of electric vehicles (EVs) in the United States. This growth is expected to plateau at 105.6 million bpd by 2029, after which a marginal decline is forecasted for 2030. This projection aligns with previous IEA statements from June 2024, where a peak by 2029 was also anticipated, suggesting consistency in their long-term outlook .

The IEA’s forecast contrasts sharply with the views of the Organization of the Petroleum Exporting Countries (OPEC), which predicts sustained oil demand growth well beyond 2029, driven by increasing energy needs in emerging economies and a slower transition to cleaner fuels. This discrepancy underscores a significant controversy in energy forecasting, with implications for investment and policy decisions.

China’s Role and Peak in 2027

China, historically a major driver of global oil demand growth, is expected to see its oil consumption peak in 2027, as per the IEA’s latest report. This peak is attributed to economic challenges and a rapid shift towards EVs, high-speed rail, and trucks running on natural gas. The Reuters article from June 17, 2025, notes that China’s total oil consumption in 2030 is projected to be only marginally higher than in 2024, a stark contrast to earlier forecasts of significant growth .

Sinopec, a major Chinese refiner, also forecasted in December 2024 that China’s oil consumption would peak by 2027 at no more than 800 million metric tons, equivalent to approximately 16 million bpd, reinforcing the IEA’s timeline .

This convergence of forecasts from multiple sources suggests a high level of certainty regarding China’s peak, though the global implications remain debated.

Factors Supporting Global Demand Growth

Despite China’s peaking demand, global oil consumption is expected to be buoyed by several factors. The IEA’s May 2025 Oil Market Report projects global oil demand growth to average 740 kb/d in 2025 and 760 kb/d in 2026, driven primarily by emerging economies in Asia, particularly India, and sectors like aviation and petrochemicals .

The slower adoption of EVs in the US, as mentioned in the June 2025 Reuters article, and cheaper gasoline prices are cited as key supports, maintaining oil demand in developed economies.

The IEA’s February 2025 report further noted that OECD demand is forecast to return to structural decline, but non-OECD regions will account for significant growth, adding 860 kb/d in 2025 and 1 mb/d in 2026.

This regional divergence is crucial, as it offsets the impact of China’s peaking demand on global figures.

Controversies and Contrasting Views

The IEA’s forecast of a peak by 2029 is not universally accepted. OPEC, for instance, maintains that oil demand will continue to rise, driven by the energy needs of emerging economies and a slower transition to renewables. This view was highlighted in various reports, such as the IEA’s comparison with OPEC’s outlook in the June 2024 news release, where OPEC’s projections extend demand growth well beyond the IEA’s timeline

. This controversy is significant, as it affects investment decisions in the oil sector and global energy policy, with implications for climate goals and economic strategies.

Detailed Data and Projections

To provide a clearer picture, below is a table summarizing key IEA projections from recent reports:

Year	Global Oil Demand Growth (kb/d)	Peak Demand (bpd)	China’s Role
2025	740	–	Slowing, peak in fuels noted
2026	760	–	Continued petrochemical growth
2027	–	–	Expected peak in total consumption
2029	–	105.6 million	Post-peak, marginal growth
2030	–	–	Slightly higher than 2024

This table, derived from the IEA’s May and February 2025 Oil Market Reports and the June 2025 annual report as reported by Reuters, illustrates the trajectory of global and Chinese oil demand, highlighting the anticipated peak and subsequent trends.

Implications and Uncertainties

The IEA’s projections suggest a well-supplied oil market in the coming years, with potential surpluses emerging, as noted in the March 2025 Oil Market Report, where global supply is expected to exceed demand by around 600,000 bpd in 2025

In conclusion, the IEA’s latest analysis, as of June 17, 2025, provides a detailed outlook where global oil demand is expected to peak by 2029, despite China’s earlier peak in 2027, driven by regional and sectoral dynamics. This forecast, while robust, is part of a broader debate with significant implications for global energy markets and policy, necessitating ongoing monitoring and analysis.