World oil and gas demand could grow until 2050, IEA says

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By Susanna Twidale

LONDON (Reuters) -Global oil and gas demand could grow until 2050, the International Energy Agency said on Wednesday, departing from previous expectations of a speedy transition to cleaner fuels following U.S. criticism about its climate focus.

The Paris-based energy security watchdog also predicted in its annual outlook that the world will likely fail to meet its goal to cap the rise in temperatures to as close as possible to 1.5 degrees (2.7 degrees Fahrenheit) above pre-industrial times to avoid the most devastating effects of climate change.

The IEA has been under pressure from the U.S. for a shift in recent years toward a focus on clean energy policies as President Donald Trump called on American companies to expand oil and gas production.

During the Biden administration, it predicted that global oil demand would peak this decade and said there should be an end to investment in new oil, gas and coal projects if the world wanted to reach net zero emissions by mid-century.

‘NOTION OF PEAK OIL’

Trump’s Energy Secretary Chris Wright has called its demand peak projections “nonsensical”. The IEA is funded by member countries, with the U.S. the largest contributor.     

In its World Energy Outlook published on Wednesday, the IEA predicted under a current policies scenario that oil demand will hit 113 million barrels per day by mid-century, up around 13% from 2024 consumption.    

It predicted that global energy demand will climb by 90 exajoules by 2035 – a 15% increase from present levels. 

The scenario, which the IEA first used in 2019 before switching to one more in line with a clean energy transition, is based on existing government policies and not aspirations to achieve climate goals.

IEA head Fatih Birol said on a press call the scenario was restored to reflect differing choices governments are making about energy.

The Organization of the Petroleum Exporting Countries has previously disputed peak oil demand forecasts.

“We hope… we have passed the peak in the misguided notion of ‘peak oil.’” OPEC said on its website on Wednesday.

This year’s outlook ditched the pledges scenario as the IEA said not enough countries had submitted new commitments to produce a meaningful picture.

In the stated policies scenario, which considers proposed but not necessarily adopted policies, oil demand peaks around 2030. The difference in projections is largely due to diverging expectations of EV uptake.

The IEA says its scenarios explore a range of possible outcomes under various sets of assumptions and are not forecasts.

LNG CAPACITY TO SOAR

Final investment decisions for new liquefied natural gas projects have surged in 2025, the report noted. Operations for about 300 billion cubic metres of new annual LNG export capacity will start by 2030, marking a 50% increase in available supply. 

Based on the current policies scenario, the global LNG market increases from around 560 bcm in 2024 to 880 bcm in 2035 and to 1,020 bcm in 2050, driven by rising power sector demand fuelled by data centre and AI growth.

Global investment in data centres is expected to reach $580 billion in 2025, the report said, noting that if achieved this would surpass the $540 billion a year spent globally on oil supply.

The report includes a scenario describing a pathway to reduce global energy emissions to net zero by 2050.

More than 190 countries pledged at the Paris climate talks in 2015 to try to keep the world from warming more than 1.5 C.

The report shows the world surpassing that in all scenarios.

“We need to speed up and scale up and governments at COP30 must now agree on a global response plan to urgently bridge the 1.5 C ambition gap,” Kaisa Kosonen, senior policy adviser at Greenpeace Nordic said, referring to the U.N. climate talks underway in Brazil.

(Reporting by Susanna Twidale; Editing by Emelia Sithole-Matarise)