INDUSTRY REPORT
Oil supply and demand
Growth in the world ’ s demand for oil is expected to slow in the coming years as energy transitions advance . At the same time , global oil production is set to ramp up , easing market strains and pushing spare capacity towards levels unseen outside of the COVID-19 crisis , according to the IEA ’ s new oil market outlook .
‘ Oil 2024 ’, the latest edition of the IEA ’ s annual medium-term market report , examines the far-reaching implications of these dynamics for oil supply security , refining , trade and investment . Based on today ’ s policies and market trends , strong demand from fast-growing economies in Asia , as well as from the aviation and petrochemicals sectors , is set to drive oil use higher in the coming years , the report finds . But those gains will increasingly be offset by factors such as rising electric car sales , fuel efficiency improvements in conventional vehicles , declining use of oil for electricity generation in the Middle East , and structural economic shifts .
As a result , the report forecasts that global oil demand which , including biofuels , averaged just over 102 million barrels per day in 2023 , will level off near 106 million barrels per day towards the end of this decade .
In parallel , a surge in global oil production capacity , led by the United States and other producers in the Americas , is expected to outstrip demand growth between now and 2030 . Total supply capacity is forecast to rise to nearly 114 million barrels a day by 2030 , a staggering eight million barrels per day above projected global demand , the report finds . Spare capacity at such levels could have significant consequences for oil markets — including for producer economies in OPEC and beyond , as well as for the U . S . shale industry .
Despite the slowdown in growth , global oil demand is still forecast to be 3.2 million barrels per day higher in 2030 than in 2023 unless stronger policy measures are implemented or changes in behaviour take hold . The increase is set to be driven by emerging economies in Asia , especially higher oil use for transport in India , and by greater use of jet fuel and feedstocks from the booming petrochemicals industry , notably in China . In contrast , oil demand in advanced economies is expected to continue its decadeslong decline , falling from close to 46 million barrels per day in 2023 to less than 43 million barrels per day by 2030 .
Electricity in focus
The 2024 edition of the IEA ’ s ‘ Tracking SDG 7 : The Energy Progress Report ’ confirms that the number of people without access to electricity increased for the first time in over a decade , as population grew — mostly in Sub-Saharan Africa — at a higher rate than that of new electricity
Image : Andrea Gucklhorn / Unsplash . connections . This left 685 million people without electricity in 2022 , ten million more than in 2021 . A combination of factors contributed to this including the global energy crisis , inflation , growing debt distress in many low-income countries and increased geopolitical tensions .
However , promising trends in the rollout of decentralised energy solutions , largely based on renewable energy , are helping to accelerate progress particularly in rural areas where eight in ten people without access live today .
Growth in electricity demand in 2024 and 2025 is forecast to be among the highest levels in the past two decades , a separate new IEA report finds , with solar PV alone expected to meet half
Solar PV alone is expected to meet roughly half of the growth in global electricity demand over 2024 and 2025
Solar power panels . of the increase . The world ’ s demand for electricity is rising at its fastest rate in years , driven by robust economic growth , intense heatwaves and increasing uptake of technologies that run on electricity such as EVs and heat pumps , according to a new report by the IEA . At the same time , renewables continue their rapid ascent , with solar PV on course to set new records .
Global electricity demand is forecast to grow by around 4 % in 2024 , up from 2.5 % in 2023 , the IEA ’ s ‘ Electricity Mid-Year Update ’ finds . This would represent the highest annual growth rate since 2007 , excluding the exceptional rebounds seen in the wake of the global financial crisis and the COVID-19 pandemic . The strong increase in global electricity consumption is set to continue into 2025 , with growth around 4 % again , according to the report .
Renewable sources of electricity are also set to expand rapidly this year and next , with their share of global electricity supply forecast to rise from 30 % in 2023 to 35 % in 2025 . The amount of electricity generated by renewables worldwide in 2025 is forecast to eclipse the amount generated by coal for the first time . Solar PV alone is expected to meet roughly half of the growth in global electricity demand over 2024 and 2025 , with solar and wind combined meeting as much as three-quarters of the growth .
After declining in 2023 amid mild weather , electricity demand in the United States is forecast to rebound this year by 3 % amid steady economic growth , rising demand for cooling and an expanding data centre sector . The European Union will see a more modest recovery in electricity demand , with growth forecast at 1.7 %, following two consecutive years of contraction amid the impacts of the energy crisis .
With the rise of artificial intelligence ( AI ), the electricity demand from data centres is drawing increased attention , underscoring the need for more reliable data and better stocktaking measures . The report also highlights the wide range of uncertainties concerning the electricity demand of data centres including the pace of deployment , the diverse and expanding uses of AI , and the potential for energy efficiency improvements . n
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38 | ismr . net | ISMR September 2024