Global oil and gas demand is projected to continue increasing until 2050, as per the latest insights shared by the International Energy Agency (IEA) on Wednesday. This shift in outlook deviates from earlier expectations of a rapid transition to cleaner energy sources, which had been influenced by critiques from the U.S. regarding the IEA’s environmental focus.
According to the IEA’s annual forecast, the world is unlikely to meet its target of limiting the temperature rise to around 1.5 degrees Celsius above pre-industrial levels to mitigate the severe impacts of climate change. The agency had been under pressure from the U.S. to emphasize clean energy policies, particularly during the tenure of President Donald Trump, who advocated for increased oil and gas production by American companies.
Contrary to previous estimates during the Biden administration that suggested a peak in global oil demand in the current decade, the IEA now anticipates oil demand to reach 113 million barrels per day by 2050 under an existing policies scenario. This represents a significant increase from the 2024 consumption levels. The report also forecasts a 15% rise in global energy demand by 2035, amounting to 90 exajoules.
The IEA acknowledged criticism from the U.S., its largest contributor, regarding peak demand projections, with Energy Secretary Chris Wright terming them as “nonsensical.” The agency’s scenario analysis, which is based on prevailing government policies rather than aspirational climate targets, reflects the varied energy choices made by different nations.
Experts have weighed in on the report, with Rachel Cleetus from the Union of Concerned Scientists commending the progress in renewable energy and energy efficiency globally but highlighting the persistent dominance of fossil fuels. On the other hand, Wilmar Suarez from think-tank Ember believes that the IEA underestimates the speed and scale of renewable energy expansion, particularly in developing nations.
Meanwhile, the IEA pointed out a significant uptick in final investment decisions for new liquefied natural gas (LNG) projects in 2025. The report suggests that approximately 300 billion cubic meters of new annual LNG export capacity will be operational by 2030, signifying a 50% surge in supply availability. This growth is attributed to increasing demand from the power sector, driven by the expansion of data centers and artificial intelligence applications.
Furthermore, the report highlights the escalating investments in data centers, with projected global spending expected to surpass the annual expenditure on oil supply. The IEA also outlined a scenario detailing a roadmap to achieve net-zero global energy emissions by 2050, aligning with the commitments made by over 190 countries at the Paris climate conference in 2015 to limit global warming to 1.5 degrees Celsius.