The International Energy Agency (IEA) said that with the gradual abandonment of fossil fuels and adequate supply, the global oil market will face a "serious" surplus in this decade. IEA said in its annual mid-term outlook that due to the surge in sales of electric cars and improved fuel efficiency, global oil consumption will "stabilize" at 105.6 million barrels per day in 2029, about 4% higher than last year's level. Meanwhile, oil production continues to soar. Led by the United States, this number will be "stunningly" 8 million barrels/day higher than demand by the end of this decade, the highest level since the COVID-19 pandemic. "As demand rebound after the epidemic loses momentum and the transition to clean energy advances, global oil demand growth is slowing down," said Fatih Birol, head of the IEA. "Continually increasing oil supply may put pressure on oil prices at the end of this decade." Due to strong demand, conflicts in the Middle East and supply restrictions from OPEC+, as well as increased production in the Americas, international oil prices have approached $80 per barrel this year. IEA said that global oil consumption will continue to grow in the coming years, and by 2020, global oil consumption will increase by about 4 million barrels per day, as India and China expand their economies and demand increases in the aviation and petrochemical industries. However, oil consumption in developed economies will continue to "decline for decades" and will fall from 46 million barrels per day last year to 43 million barrels per day by 2030, the lowest level since 1991. Large oil companies such as BP and Shell have adjusted their diversification plans from hydrocarbon to renewable energy, while other companies such as ExxonMobil are still firmly focused on oil and gas. It is worth noting that some of IEA's past predictions have deviated. Ten years ago, the agency warned many times that the oil supply "tightening" was about to come, but this "tightening" never became a reality due to the prosperity of shale oil in the United States, which broke people's expectations. In 2022, the agency predicts that Russia's oil production will immediately collapse, but this also did not happen. In another report released on Wednesday, the agency lowered its forecast for this year's oil demand growth by 100,000 barrels per day to 960,000 barrels per day. The report said that "slowing oil demand growth and increasing inventories indicate that the market is adequately supplied." IEA predicts that one of the risks it faces is whether the global transition to clean energy is slower than expected. In March, the Republican leaders criticized IEA's predictions in a letter, saying that its predictions were influenced by pressure to achieve climate change goals. IEA said that to achieve the goal of net zero carbon emissions by 2050, new oil and gas projects need to stop receiving investment. The report said that the fastest-growing new oil supply outside of OPEC+ will exceed demand next year. Oil-producing countries led by the United States in the 2020s will increase production capacity by about 4.8 million barrels/day, exceeding consumption growth, with 2.1 million barrels from the United States and the rest from Argentina, Brazil, Canada, and Guyana. If exploratory projects are approved, more projects may be put into production. About 45% of the expansion in production capacity globally will come from liquefied natural gas and condensate. This new wave of oil will erode market share of OPEC+ led by Saudi Arabia and Russia. Last weekend, OPEC consisting of 22 countries announced a plan to restore suspended supplies later this year. Earlier this year, Saudi Arabia suspended plans to massively expand production capacity.

IEA said that due to the surge in sales of electric cars and improved fuel efficiency, global oil consumption will "stabilize" at 105.6 million barrels per day in 2029, about 4% higher than last year's level.

Meanwhile, oil production continues to soar. Led by the United States, this number will be "stunningly" 8 million barrels/day higher than demand by the end of this decade, the highest level since the COVID-19 pandemic.

"As demand rebound after the epidemic loses momentum and the transition to clean energy advances, global oil demand growth is slowing down," said Fatih Birol, head of the IEA. "Continually increasing oil supply may put pressure on oil prices at the end of this decade."

Due to strong demand, conflicts in the Middle East and supply restrictions from OPEC+, as well as increased production in the Americas, international oil prices have approached $80 per barrel this year.

IEA said that global oil consumption will continue to grow in the coming years, and by 2020, global oil consumption will increase by about 4 million barrels per day, as India and China expand their economies and demand increases in the aviation and petrochemical industries.

However, oil consumption in developed economies will continue to "decline for decades" and will fall from 46 million barrels per day last year to 43 million barrels per day by 2030, the lowest level since 1991.

Large oil companies such as BP and Shell have adjusted their diversification plans from hydrocarbon to renewable energy, while other companies such as ExxonMobil are still firmly focused on oil and gas.

It is worth noting that some of IEA's past predictions have deviated.

Ten years ago, the agency warned many times that the oil supply "tightening" was about to come, but this "tightening" never became a reality due to the prosperity of shale oil in the United States, which broke people's expectations. In 2022, the agency predicts that Russia's oil production will immediately collapse, but this also did not happen.

In another report released on Wednesday, the agency lowered its forecast for this year's oil demand growth by 100,000 barrels per day to 960,000 barrels per day. The report said that "slowing oil demand growth and increasing inventories indicate that the market is adequately supplied."

IEA predicts that one of the risks it faces is whether the global transition to clean energy is slower than expected.

In March, the Republican leaders criticized IEA's predictions in a letter, saying that its predictions were influenced by pressure to achieve climate change goals. IEA said that to achieve the goal of net zero carbon emissions by 2050, new oil and gas projects need to stop receiving investment.

The report said that the fastest-growing new oil supply outside of OPEC+ will exceed demand next year.

Oil-producing countries led by the United States in the 2020s will increase production capacity by about 4.8 million barrels/day, exceeding consumption growth, with 2.1 million barrels from the United States and the rest from Argentina, Brazil, Canada, and Guyana. If exploratory projects are approved, more projects may be put into production. About 45% of the expansion in production capacity globally will come from liquefied natural gas and condensate.

This new wave of oil will erode market share of OPEC+ led by Saudi Arabia and Russia. Last weekend, OPEC consisting of 22 countries announced a plan to restore suspended supplies later this year. Earlier this year, Saudi Arabia suspended plans to massively expand production capacity.