IEA confirms slowing oil demand projections with data

International Energy Agency (IEA) Director Fatih Birol defended the agency's predictions about slowing oil demand during a press briefing. Birol stated that the latest energy data confirmed the IEA's earlier forecasts, which differed significantly from those of other organizations. While other analysts predicted a rise in oil demand of 2 million barrels per day, the IEA projected an increase of less than 1 million. Birol faced criticism from some U.S. lawmakers in oil-producing states, who accused the IEA of favoring an energy transition agenda. Despite this backlash, Birol emphasized that data remains the strongest evidence, declaring, “Data always wins.” According to the IEA's recent report, global oil demand increased by just under 1 million barrels per day in 2024, matching their forecasts. The report also revealed that oil now makes up less than 30 percent of the global energy mix for the first time. Although overall energy demand increased significantly, this growth was mainly driven by electricity, especially in developing countries. Birol pointed out that the demand for electricity is expected to grow by 4 percent per year until 2027. Renewable energy sources, such as wind and solar, played a vital role in meeting this rising electricity demand. The IEA reported a record high for new generation capacity in renewable energy, marking the 22nd consecutive year of growth in clean energy. However, greenhouse gas emissions from the energy sector still rose, albeit at a slower pace than the previous year. Birol also highlighted a potential challenge associated with clean energy technology: the supply of key minerals required for wind turbines and batteries. These resources include copper, lithium, and cobalt, which are mainly mined in specific regions. Birol warned that demand for these critical minerals could surpass supply in the near future. As the energy landscape continues to evolve amid geopolitical uncertainties, Birol reiterated the importance of relying on objective data and realistic assessments. He stressed the need for a comprehensive approach to energy and resource management moving forward.