ENERGY SECURITYEnergy Agency Says Global Thirst for Oil Finally May Be Topping Out

Published 18 July 2023

Is the globe’s thirst for oil finally topping out? A major international energy watcher says yes, predicting last month that demand for global oil for transport will peak around 2026, plateau for all uses by 2028, and possibly hit a zenith by the end of the decade. This would be great news for environment, expert say, but issues in developing world may foil hopes.

Is the globe’s thirst for oil finally topping out?

A major international energy watcher says yes, predicting last month that demand for global oil for transport will peak around 2026, plateau for all uses by 2028, and possibly hit a zenith by the end of the decade.

Harvard experts say the forecasts track with what’s going on in the developed world, where climate change concerns have fostered a push to electrify transportation, boost renewables, and reduce fossil fuels. But, they say, the energy needs of less-wealthy nations pressing to develop their economies could foil expectations for years to come.

The International Energy Agency, established by the Organization for Economic Co-operation and Development in the 1970s to provide energy data and policy advice, predicted that demand for oil for transportation would peak in 2026 as a result of electric-vehicle (EV) adoption, biofuel growth, and improved fuel economy. It predicted increases in demand in all sectors would slow from 2.4 million barrels per day this year to just 0.4 million barrels per day in 2028, with a potential overall peak by 2030.

Henry Lee, the Jassim M. Jaidah Family Director of the Harvard Kennedy School’s Environmental and Natural Resource Program and senior lecturer in public policy, said despite many variables at play, he wouldn’t be surprised if the peak of oil use for transportation is achieved by 2026. Even if that proves too rosy, it’s still likely to be achieved by early in the next decade, he said.

Lee said he’s been surprised at how quickly parts of the world are moving toward EV adoption. In China, the world’s largest auto market, electric vehicle sales in the first five months of 2023 were up by 26 percent. Sales by BYD Auto, China’s largest EV maker, are up 92 percent this year, he said.

Likewise, American companies have poured resources into EV design and manufacturing. Both Ford and GM are planning to release new models in 2025, 2026, and 2027, Lee said, while Volkswagen, with new vehicles planned for 2026 and 2027, expects the majority of its fleet to be electric soon.