OPEC and the IEA disagree on oil demand forecasts

By Rhod Mackenzie

Reuters reports that the OPEC group and the International Energy Agency (IEA) have different forecasts for global oil demand in the next 16 years.
The IEA predicts a record level of oil demand in 2024, with an increase of 1.22 million barrels per day. On the other hand, OPEC predicts a higher increase of 2.25 million barrels per day.
According to experts, this discrepancy arises because traders receive varying signals regarding the pace of oil market development and the speed of the transition to renewable energy.
According to Neil Atkinson, former head of the IEA's oil markets division, the IEA has a clear view that the energy transition will move at a much faster pace. Atkinson suggests that both agencies have painted themselves into a corner, resulting in a significant gap in demand forecasts.

OPEC and the IEA disagreed on peak oil demand forecasts. OPEC predicts the peak will not be reached until 2045, while the IEA projects it as early as 2030.
Reuters analysts suggest that their own forecasts for the global oil market align more closely with the IEA's projections. They estimate that demand growth will be around 1.3 million barrels per day.
However, a Reuters analysis revealed that the IEA underestimated total demand in its original forecast 56% of the time between 2008 and 2023, compared to OPEC's 50%. Atkinson stated that while both agencies accurately forecast demand dynamics, he believes OPEC's forecast is more likely to be accurate in terms of peak demand this decade.