U.S. Gasoline Appetite and Slower EV Adoption Offset China Decline
June 18 — Global oil demand is expected to continue rising until the end of the decade, driven by resilient consumption in the United States, even as top importer China hits its peak in 2027, the International Energy Agency (IEA) said Tuesday.
In its annual oil market report, the Paris-based agency said global demand will reach a peak of 105.6 million barrels per day (bpd) in 2029 before easing slightly by 2030. This forecast holds steady despite a projected decline in China’s appetite for crude, as the country accelerates electric vehicle (EV) adoption and shifts to alternative transport solutions.
The IEA’s outlook stands in sharp contrast to that of OPEC, which continues to project oil demand growth well beyond 2030.
Meanwhile, global oil production capacity is forecast to grow more than 5 million bpd by 2030 — reaching 114.7 million bpd — suggesting that the market will be well-supplied in the near term if there are no major disruptions.
“Based on the fundamentals, oil markets look set to be well-supplied in the years ahead,” IEA Executive Director Fatih Birol said. “But recent events sharply highlight the significant geopolitical risks to oil supply security,” he added, referencing the latest escalation between Israel and Iran, which pushed prices 5% higher to above $74 per barrel last week.
U.S. Demand Reshapes Forecasts
While China’s oil demand is plateauing — with 2030 levels projected to be only slightly higher than in 2024 — the U.S. is seeing renewed growth. Lower gasoline prices and a slowdown in EV uptake have prompted the IEA to raise its 2030 U.S. oil demand forecast by 1.1 million bpd compared to last year.
EVs are now expected to account for just 20% of U.S. car sales in 2030, far below the 55% the agency had previously assumed. The shift comes as U.S. President Donald Trump, now back in office, presses OPEC to reduce oil prices and rolls back EV-friendly policies, including restrictions on California’s clean car mandates.
China Hits a Ceiling
China, long the engine of global oil demand growth, is facing headwinds. The IEA expects its consumption to peak in 2027 amid rising EV sales, increased use of natural gas for freight transport, and continued expansion of high-speed rail networks. Earlier this year, the agency said China’s demand for road and air transport fuels may have already topped out.
In contrast to last year’s projection of roughly 1 million bpd growth in Chinese demand through 2030, the IEA now sees almost no increase over that period.
Market to Stay Balanced — for Now
For 2025, global oil supply is projected to increase by 1.8 million bpd, with much of the growth coming from OPEC+ countries, including Russia. Demand, however, is expected to grow by just 720,000 bpd — a figure trimmed slightly from last month’s forecast.
While the fundamentals suggest stability, the IEA cautions that geopolitical risks, particularly in the Middle East, could quickly disrupt the outlook.
The agency also released a separate update Tuesday assessing the oil market impacts of the Israel-Iran conflict. It concluded that barring a major escalation, supply in 2024 and 2025 appears sufficient to meet projected demand.
