The Organization of the Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA) are currently experiencing their most significant divergence in oil demand forecasts since at least 2008, introducing a level of uncertainty into the global oil market. Reuters research revealed that the two influential entities are offering conflicting signals to traders and investors regarding oil market strength in 2024 and the pace of the world’s transition to cleaner energy sources.
In February of this year, the IEA projected a 1.22 million barrels per day (bpd) increase in oil demand for 2024, while OPEC anticipated a higher growth rate of 2.25 million bpd for the same period. This substantial disparity, equivalent to approximately 1% of global demand, underscores the contrasting viewpoints held by the two organizations.
Neil Atkinson, a former head of the IEA’s Oil Markets Division, highlighted the differing perspectives on the energy transition, with the IEA advocating for a faster pace compared to OPEC. Both agencies have solidified their positions, resulting in a significant gap in demand forecasts.
Analyses of historical data from 2008 to 2023 revealed that the 1.03 million bpd difference in February marked the largest disparity in per-barrel terms over this period. While the IEA foresees oil demand peaking by 2030 in alignment with a shift towards cleaner fuels, OPEC remains steadfast in its projection of sustained growth up to 2045, citing factors such as non-OECD growth and resistance to net-zero policies.
The IEA’s transition from an energy supply security advocate to a proponent of renewables and climate action has sparked debate within OPEC, with some members questioning its impartiality and accusing it of engaging in political advocacy. The divergence in forecasts reflects broader geopolitical and economic considerations, as countries grapple with the challenges of transitioning to a low-carbon economy.
Despite statistical parity in forecast accuracy between OPEC and the IEA, the market remains divided on which entity’s projections will prove accurate. Analyst estimates for 2024 demand growth align more closely with the IEA’s outlook, while opinions on whether oil demand will peak by 2030 are split, with a majority leaning towards OPEC’s perspective.