Peak Oil? Not So Fast: IEA Says Demand Could Climb to 2050

CNN, Axios, the New York Times, and Reuters contributed to this report.

The world’s top energy watchdog just threw cold water on the idea that fossil fuel demand is about to crest. In its new World Energy Outlook, the International Energy Agency says global oil and gas consumption could keep rising right through 2050 under today’s government policies — a sharp turn from its recent guidance that pointed to a peak this decade.

This isn’t a single-track prediction so much as a choose-your-future. The IEA restored its “current policies” case, which assumes no new climate policies beyond what’s already on the books. In that world, oil demand doesn’t plateau in the 2030s after all; it grinds higher to about 113 million barrels a day by mid-century — roughly 13% above 2024 levels. The agency also keeps its “stated policies” case, which factors in announced but not fully enacted measures. There, oil demand levels off around 2030, while gas demand flattens in the mid-to-late 2030s before a gentle decline.

No matter the pathway, the IEA says the planet is likely to blow past the Paris goal of holding warming to 1.5°C. In the conservative current-policies world, temperatures head toward roughly 2.9°C by 2100. Even in the more ambitious stated-policies track, emissions only fall about a fifth by 2050 — nowhere near what’s needed for net zero.

Politics are very much part of the subtext. The IEA has faced pressure from Washington to give more weight to conventional fuels, and OPEC quickly claimed vindication, arguing talk of “peak oil” has been premature. Clean-energy advocates counter that the agency is undercounting how fast technology can scale, pointing to plunging costs for solar, batteries and EVs.

One theme cuts across every scenario: electricity demand is exploding. Power use surges far faster than overall energy demand by the mid-2030s, propelled by everything from heat pumps and industry to the data-center boom. The IEA even pegs 2025 data-center investment at about $580 billion — more than the roughly $540 billion the world spends each year on new oil supply. Renewables still grow faster than any other major source, led by solar, though the IEA trims its outlook slightly amid US policy shifts and grid bottlenecks.

Gas is hardly fading. Final investment decisions for new LNG export plants have soared, with about 300 billion cubic meters of extra annual capacity slated to come online by 2030 — a 50% jump from today. The global LNG market, by the IEA’s count, climbs from roughly 560 bcm in 2024 to 880 bcm in 2035 and tops a trillion cubic meters by 2050, helped by power demand and the hunger of AI-era computing.

The IEA insists these are scenarios, not destiny. They’re meant to show what different choices deliver: keep current policies and live with higher fossil demand and higher temperatures; enact tougher rules and infrastructure to bend the curve; or sprint to a net-zero path that accelerates clean power, grids and efficiency at historic speed. For now, the takeaway is blunt. “Peak oil” is no longer a near-term given, and the gap between climate ambition and energy reality is widening, not closing.