trending Market Intelligence /marketintelligence/en/news-insights/trending/tm5kzxjprtxurbskjrnvag2 content esgSubNav
In This List

IEA warns oil production growth will fail to keep pace with demand

Podcast

Next in Tech | Episode 49: Carbon reduction in cloud

Blog

Using ESG Analysis to Support a Sustainable Future

Research

US utility commissioners: Who they are and how they impact regulation

Blog

Q&A: Datacenters: Energy Hogs or Sustainability Helpers?


IEA warns oil production growth will fail to keep pace with demand

The International Energy Agency warned March 5 that additional investment is needed to meet global oil demand growth over the next five years.

In its "Oil 2018: Analysis and Forecasts to 2023" released the same day, the IEA said it expects production growth from the U.S., Brazil, Canada and Norway could meet demand through 2020, with the U.S. providing 80% of that additional supply. But the agency said more supply growth is needed to replace the annual 3 million barrels per day of lost production at oilfields in decline.

After expanding by 1.4 MMbbl/d in 2018, the IEA expects global oil production growth to slow to 1 MMbbl/d by 2023.

"The oil industry has yet to recover from an unprecedented two-year drop in investment in 2015-2016," the IEA said in a statement. "The IEA sees little-to-no increase in upstream spending outside of the United States in 2017 and 2018."

"An added concern is that investment is overwhelmingly focused on the light tight oil (LTO) sector in the United States," the report said. "As a result, upstream investment may be inadequate to avoid a significant squeezing of the global spare capacity cushion by 2023, even as costs have fallen and project efficiency has improved."

Despite headwinds to petroleum-based transportation fuel demand growth, including policies designed to curb air pollution growth in China, increased fuel economy standards in the U.S. and increased penetration of electric buses and LNG trucks in Asia, the IEA expects economic growth to boost global oil demand at an annual average rate of 1.2 MMbbl/d through 2023.

As more of the global population reaches the middle class, the IEA expects increased demand for petrochemical-derived products, leading ethane and naphtha to account for 25% of oil demand growth over the outlook period.