Oil markets are undergoing structural changes as key supply and demand drivers of the past 15 years lose momentum amid rising geopolitical and economic uncertainty, according to the International Energy Agency (IEA).
"Over the past decade, oil market dynamics have been defined by the parallel growth in US oil supply and Chinese oil demand," IEA said in its medium-term outlook Oil 2025 on Tuesday.
From 2015 to 2024, the US accounted for 90% of the global oil supply increase, with the shale boom boosting production by more than 8 million barrels per day (bpd) to over 20 million bpd, according to Paris-based energy watchdog.
Over the same period, China's oil demand grew by nearly 6 million bpd, making up 60% of the global increase in consumption, it said, adding, "The picture to 2030 looks very different."
China's oil demand is set to peak this decade amid EV growth and economic shifts, while US supply growth slows but remains the main driver of non-OPEC+ output.
- World oil demand set to rise by 2.5 million bpd by 2030
Global oil demand is expected to grow by 2.5 million bpd through 2030, plateauing at around 105.5 million bpd.
However, annual demand growth is set to slow from about 700,000 bpd in 2025鈥�2026 to a near standstill in the following years, with a slight decline expected by 2030, the report noted.
The slowdown is driven by below-trend economic growth, weighed down by global trade tensions and fiscal imbalances, and a faster shift away from oil in transport and power generation, the report added.
Global electric car sales topped 17 million in 2024 and are set to exceed 20 million in 2025鈥攁bout a quarter of all car sales鈥攑utting EVs on track to displace 5.4 million bpd of oil demand by 2030, according to the report.
Substitution away from oil will play a major role in power generation through 2030, with Saudi Arabia leading the shift as increased use of natural gas and renewables drives the largest projected drop in oil demand by any country, the report said.
- Petrochemicals to lead demand growth from 2026
According to the report, the petrochemical sector is expected to become the leading driver of global oil demand growth from 2026 onward.
Global production of polymers and synthetic fibers is projected to consume 18.4 million bpd of oil by 2030鈥攎ore than one in every six barrels鈥攑ushing demand for combustible fossil fuels, excluding petrochemical feedstocks and biofuels, to a potential peak as early as 2027.
Refiners face pressure as petrochemical demand shifts to non-refined sources such as natural gas liquids.
Global demand for refined oil products is expected to peak at 86.3 million bpd in 2027, up just 710,000 bpd from 2024 levels.
Despite weak demand growth, global refining capacity is set to expand by 4.2 million bpd by 2030, partly offset by 1.6 million bpd of planned closures.
Global oil production capacity is set to rise by 5.1 million bpd to 114.7 million bpd by 2030, led by Saudi Arabia and the US, far outpacing the 2.5 million bpd demand growth.
Commenting on the report, IEA Executive Director Fatih Birol said oil market trends over the past decade reflect a "remarkable double act."
"Thanks to the shale revolution, the United States has accounted for 90% of oil supply growth worldwide, while 60% of the rise in global demand has come from China," Birol said.
"But these dynamics are shifting," he added.
Noting heightened geopolitical risks to oil supply, Birol said: "When it comes to energy security, there is no room for complacency. The IEA remains deeply committed to working with energy producers and consumers to safeguard energy security."
By Firdevs Yuksel and Handan Kazanci
Anadolu Agency
energy@aa.com.tr