IEA Forecasts Global Oil Demand Growth Through 2029 Despite Early Peak in China

Global oil demand is set to continue growing until the end of this decade, driven by resilient consumption in the United States and a slower-than-expected shift to electric vehicles (EVs), according to the International Energy Agency (IEA). The agency reaffirmed that worldwide demand is projected to peak by 2029, although China, the world’s top oil importer, will likely reach its demand ceiling by 2027 due to faster EV adoption.

The forecast underscores a dual-track global energy transition, with emerging markets and oil-intensive economies like the U.S. continuing to underpin demand growth, even as China advances in electrification and renewables. Lower gasoline prices (USD) in North America and lagging EV infrastructure remain key variables supporting oil consumption beyond prior estimates.

Demand Dynamics: U.S. Resilience Offsets China’s Deceleration

The IEA’s June report maintains a broadly consistent global oil demand trajectory but introduces an earlier inflection point for Chinese crude consumption, reflecting Beijing’s accelerating electrification push and policy-driven reductions in fossil fuel dependence.

Conversely, the U.S. market remains a pillar of demand, where cheaper pump prices and tepid progress on EV rollout—compared to both Europe and China—continue to delay peak consumption. This divergence complicates the global decarbonization pathway and delays the anticipated structural demand decline many market participants have priced into long-term projections.

Key Demand Trends and Projections

• 📉 China’s oil demand to peak by 2027, driven by EV penetration and industrial transition

• 📈 Global oil demand to continue growing until 2029, according to IEA outlook

• 🇺🇸 U.S. gasoline demand supported by lower prices and slow EV adoption

• ⚡ Global EV growth uneven; adoption lags in developing markets and North America

• 🔋 IEA maintains long-term forecast for demand plateau at ~105.6 million bpd by 2029

Market and Industry Reaction: Mixed Sentiment Across Energy Sector

Energy markets responded cautiously to the IEA’s update. Brent crude (BZ=F) and WTI crude (CL=F) remained within recent trading ranges, reflecting consensus on short-term tightness but long-term structural uncertainty. Oil majors such as ExxonMobil $XOM and Chevron $CVX continue to adjust capital expenditure plans based on longer-term demand expectations.

Meanwhile, EV manufacturers like Tesla $TSLA and BYD $1211.HK may face pressure to accelerate adoption rates in lagging regions. Analysts note that infrastructure bottlenecks, high battery costs, and regulatory uncertainty continue to slow the global transition.

Market and Strategic Implications

1. U.S. as Demand Anchor: The resilience of gasoline consumption in the U.S. delays the global peak, reinforcing the importance of domestic energy policy.

2. China’s Structural Shift: The earlier peak in Chinese demand reflects successful long-term planning toward electrification and emissions reduction.

3. EV Adoption Gaps: Global EV rollout remains inconsistent, hindering oil displacement.

4. Oil Price Outlook: Near-term fundamentals support stable prices; long-term forecasts face uncertainty.

5. Energy Transition Risks: Delayed oil demand peak may slow investment in renewables and undermine climate targets.

Oil Demand to Persist, Energy Transition Faces Asymmetric Challenges

The IEA’s revised demand scenario highlights a persistent reliance on fossil fuels in key regions even as others begin to decouple from oil. With global demand growth now expected through 2029, the energy transition remains uneven, shaped by local fuel economics, policy ambition, and technological uptake.

For energy producers, refiners, and policymakers, the message is clear: the decline in oil demand will be neither linear nor synchronized. A multipolar world of energy use is emerging—one where peak demand arrives at different times, in different ways.