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A new report from the International Energy Agency (IEA) highlights a potential oversupply of oil by the decade’s end, driven by increased production and decreased demand as consumers and businesses turn to electric vehicles and renewable energy sources.
The IEA’s announcement Wednesday forecasts the global oil supply capacity rising to approximately 114 million barrels per day by 2030. The projected capacity would surpass expected demand by 8 million barrels per day, marking a significant surplus not seen since the COVID-19 pandemic lockdowns of 2020.
The rise in oil supply is partly attributed to the anticipated continuation of the shift towards electric vehicles, particularly in developed nations. The IEA predicts that global sales of electric vehicles could reach 40 million units by 2030, with nearly half of all new cars being electric.
While the potential for an oil oversupply could lead to lower prices, the IEA’s report presents a range of possible price scenarios for 2030. Prices could vary from over $90 per barrel to under $60 per barrel, compared to the current trading price of approximately $82 per barrel.
However, some experts caution against over-interpreting the report.
Patrick De Haan, head of petroleum analysis at GasBuddy, pointed out potential challenges in the report’s projections, including slower-than-expected adoption of electric vehicles and the high costs associated with this transition, CBS News reported.
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