The oil markets are currently facing a wave of uncertainties, driven by geopolitical tensions and changing global economic conditions. Recent findings from the medium-term outlook report, Oil 2025, indicate that the influential factors shaping supply and demand in the oil sector over the past fifteen years are diminishing. These emerging trends could significantly alter the landscape of global oil markets moving forward.
One of the noteworthy shifts is China’s projected peak in oil consumption by 2027, largely due to a rise in electric vehicle sales and significant economic restructuring. Concurrently, U.S. oil supply growth is forecasted to slow down as companies prioritize capital discipline and moderate spending. Despite this, the United States will continue to be the leading contributor to non-OPEC oil supply growth over the next few years.
The report predicts global oil demand will rise by 2.5 million barrels per day (mb/d) between 2024 and 2030, ultimately reaching approximately 105.5 mb/d by the end of the decade. In parallel, global oil production capacity is set to expand by more than 5 mb/d, reaching 114.7 mb/d by 2030. In addition to oil market dynamics, the report highlights the critical importance of minerals essential for energy and economic security.
Constraints on the supply of these minerals, such as copper, lithium, and cobalt, pose risks to energy security, as detailed by the Executive Director of the IEA, Dr. Fatih Birol. The dependence on a limited number of producers, particularly in China, raises concerns regarding market diversification. To address these challenges, the IEA is enhancing initiatives through its Voluntary Critical Minerals Security Programme, aimed at building resilience and improving supply chain diversification.
Upcoming workshops and activities are planned to address these pressing issues through strategic collaboration.