A new report paints a future where oil might be downgraded from its ‘black gold’ status to something like tin or nickel.
Driving the news: Global oil demand is forecast to peak by 2029, per a new International Energy Agency (IEA) report, with production topping out at 114 million barrels a day by 2030. This would result in a massive 8 million barrels a day surplus that would knock down prices.
- The IEA predicts that the increasing accessibility of mass renewable energy will spur this drop in demand.
- However, the group did hedge its bets, warning that oil demand could pick back up if GDP growth takes off or electric vehicle adoption slows.
Why this matters: Between now and 2030, Canadian oil production is projected to grow by 8.7%, thanks in part to the Trans Mountain pipeline expansion. If the IEA is to be believed, Canada has a narrow window to capitalize on this increase before the bottom drops out.
Bottom line: A 2023 report by the International Institute for Sustainable Development found the oil and gas industry is “ill-prepared” to deal with a drop in demand. That leaves the sector with just under a decade to meaningfully diversify into other energy sources.—QH