BAKU, Azerbaijan, June 12. The International Energy Agency (IEA) expects the global oil demand growth this year to stand at about 1 million barrels per day, said Fatih Birol, Executive Director of IEA, during the launch of the Oil 2024 report, Trend reports.
“We expect that looking beyond 2024, oil demand growth will continue to slow down. Before 2030, it will plateau and then see the peak. There are three major drivers of the slowdown of the global oil demand growth. The first one is on the transportation sector. The major penetration of the electric cars in China, Europe, US, in emerging countries is a key driver. This year we expect more than one out of five cars in the world sold to be an electric car. This number may be even slightly higher. We see that the electric cars are becoming cost competitive vis-à-vis their counterparts,” he said.
Birol noted that the second driver comes from the electricity generation.
“Today, especially in the Middle East and some North African countries, we see significant amount of oil used to generate electricity. It's about close to 1.5 million barrels per day driven by mainly Saudi Arabia, Iraq, Kuwait, and the others. We know that in many of those countries, especially Saudi Arabia, there are strong plans in place to replace the oil used for electricity generation by renewables or natural gas. So, this is another important driver,” he said.
IEA’s executive director believes that the third and, perhaps the most important driver for the slowdown of the global oil demand growth comes from China.
“In the last 10 years, about 60 percent of global oil demand growth came from China alone. At that time, Chinese economic growth in the last 10 years increased on average slightly higher than 6 percent per year. And now, a slowdown is expected in the Chinese economic growth. This will have implications for the Chinese energy demand in general and oil demand in particular,” he said.
Fatih Birol went on to add that there are sectors which are still pushing the demand up, such as the jet fuel and the booming petrochemical sector.
“These are two important drivers of oil demand in the next years to come. In terms of countries, Asia is usually the main driver. India emerges as a growing demand center there. When it comes to advanced economies, North America, Europe, Japan and others, the declining trend continues, and our expectation is the oil demand levels for the advanced economies in 2030 will be coming to the level that the advanced economies saw in the early 1990s,” he explained.
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