Global oil and gas demand will rise for the next 25 years if the world does not change course, the International Energy Agency (IEA) has said, in a new scenario that reflects governments’ fading commitment to climate change.
Until this year, all of the Paris-based body’s modelling assumed that fossil fuel consumption would peak this decade, a claim that was hotly contested by the oil and gas industry and the White House.
But in its latest World Energy Outlook, published on Wednesday, the body, whose research helps to shape global energy policies, said if the world continued on its present trajectory, oil and gas demand would continue to rise and there would be no meaningful fall in CO₂ emissions.
It laid out a scenario taking in countries’ changing stance on climate goals, as well as a growing desire for secure and affordable energy and a slowdown in the growth of electric vehicles.
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“Climate change is declining – and declining rapidly – in the international energy policy agenda,” Fatih Birol, the head of the IEA, told the Financial Times. “And this is happening while 2024 was the hottest year in history.”
The report, released as leaders gather in Belém, Brazil, for the COP30 climate change summit, states it is now “all but certain that 1.5 degrees of warming will be exceeded within a decade or less, and that pathways that limit this overshoot to low levels have now slipped out of reach”.
The IEA said it had not introduced its new scenario in response to pressure from the US, which has strongly criticised the notion of “peak oil” as it attempts to boost its fossil fuel industry and achieve “energy dominance”.
In July, Chris Wright, the US energy secretary, told Bloomberg that the IEA’s modelling of peak fossil fuels was “total nonsense”, that he was in contact with Mr Birol and that the US would either reform the IEA or withdraw its support. The US contributes 14 per cent of its budget.
The IEA said there was a “wider range of uncertainty around the outlook” this year, and it had discussed its approach with “all our member governments and they expressed their interest in multiple scenarios”.
Big oil and gas producers such as the US, Saudi Arabia and the United Arab Emirates have insisted the world needs all forms of energy, including oil and gas, in order to meet the surging demand for power from artificial intelligence and rising living standards.
Under the new scenario, called Current Policies, energy and climate change policies that are in force “remain as they are for the next 25 years and no new policies are introduced”, said Mr Birol.
Traditionally, the Current Policies scenario was included in the watchdog’s World Energy Outlooks but it was dropped from 2020 after campaigners said it had understated growth in renewable energy sources. However, the decision drew criticism in the US, where the House committee on energy and commerce pushed for its reintroduction last year.
“For some people it is very optimistic, for some people it is very pessimistic,” Mr Birol said, adding that the IEA did not assign any probabilities to each of its scenarios. “We just put the scenarios on the table.”
The Current Policies scenario envisages the share of EVs reaching a plateau of about 40 per cent by 2035, and oil demand growing from 100 million barrels a day in 2024 to 113 million barrels per day (b/d) by 2050, underpinned by the aviation, trucking and petrochemical industries.
Under the IEA’s Stated Policies scenario, which reflects energy and climate policies that have been proposed, if not yet put into law, oil demand peaks at 102 million b/d by 2030 with half of all vehicles sold in 2035 being electric.
Both scenarios also assume strong growth in gas, but that the use of coal peaks this decade before declining.
At the heart of all of the IEA’s projections is a huge growth in electricity demand, which rises roughly 40 per cent by 2035 in both the Current Policies and Stated Policies scenarios and 50 per cent in a more ambitious Net Zero scenario.
By 2035, 80 per cent of energy consumption growth would come in regions that were well suited to solar power, it said.
The IEA said this demand growth was driven by the increasing penetration of white goods and air conditioners, as well as advanced manufacturing and data centres.
While investment in data centres was concentrated in advanced nations, the energy sector would be increasingly shaped by emerging economies led by India and southeast Asia and including the Middle East, Latin America and Africa, it added.
Representatives of the renewable energy industry noted all of the scenarios the IEA suggested show continuing huge growth in clean energy.
“Nearly all new electricity demand – driven by manufacturing growth, AI, cooling needs, and the shift to electric cars – will be supplied by renewable energy,” said Bruce Douglas, chief executive of the Global Renewables Alliance. – Copyright The Financial Times Limited 2025
