What Peak Oil Demand Means for Gas Prices

By: Anneken Tappe · June 17, 2024 · Reading Time: 2 minutes

Peak Prediction

In many ways, oil still makes the world go round, as fossil fuels remain the way much of the world and its manufacturing capacity is powered. Not only that, many of us drive cars with gas engines that need fueling. That’s to say, the oil price affects us all, whether we want it or not.

It’s relevant then, that the International Energy Agency (IEA) predicts that oil demand will reach its peak in 2030.

Demand Plateau

According to the IEA’s latest report , the world’s capacity for oil production will continue to grow, but demand won’t necessarily hold pace, thanks to clean energy technologies, electric vehicles, and fuel efficiency gains in fossil fuel-guzzling engines.

More oil supply and less demand could mean a decline in oil prices, and therefore what consumers pay at the pump. It could also spell trouble for oil producers though.

Fossil Future

Critics of the IEA’s projections see the agency underestimating demand in developing countries, many of which don’t see the same surge of clean technology demand as the U.S.

S&P Global doesn’t expect peak demand to arrive until 2034, for example. And OPEC believes demand will continue to grow for much longer, through 2045 and possibly beyond.

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