China will overtake the U.S. as the world’s biggest oil consumer within two decades, according to the International Energy Agency.
“A landmark is reached in the early 2030s, when China becomes the largest oil-consuming country, crossing paths with the United States,” the agency said in a summary of its World Energy Outlook, which forecasts long-term energy trends. The full findings of the report will be presented at a press conference in London today.
Growth in oil demand to 2040 will also be driven by India, Southeast Asia, the Middle East and sub-Saharan Africa, the IEA said. Consumption in developed economies will shrink, with oil use in the U.S. falling to the lowest level in decades, it said.
Brent crude fell to a four-year low yesterday and is trading in a bear market amid signs that global demand growth isn’t keeping pace with supply. Members of the Organization of Petroleum Exporting Countries including Saudi Arabia and Iraq are resisting calls to cut output. They have instead reduced export prices to the U.S., where they’re competing with the fastest rate of production in more than 30 years.
U.S. production of “tight oil” from shale deposits will plateau in the next 10 years and eventually fall, the IEA said, reiterating similar comments from last year’s outlook.
Global oil demand will rise 16 percent to 104 million barrels a day in 2040, compared with 90 million last year, the Paris-based adviser to industrialized nations said. The pace of demand growth will slow to 1 percent a year from 2025 after climbing more than 2 percent annually in the last two decades, it said.
The developing nations of Asia will account for 60 percent of total demand growth in the period, the agency said. Oil use will probably decline in members of the Organisation for Economic Cooperation and Development, which includes the U.S., Germany and Japan.
“For each barrel of oil no longer used in OECD countries, two barrels more are used in the non-OECD,” the IEA said.