The world will soon have more oil than it knows what to do with, according to a new report.

Demand will slow and supply will grow through 2030, largely due to increases in clean energy, the International Energy Agency said Tuesday.

What You Need To Know

  • The global supply of oil will outpace demand by 2030, according to a new report from the International Energy Agency

  • Global oil demand will level off at about 106 million barrels per day in 2030

  • Dramatic increases in oil production in the United States, Canada, Argentina and Brazil will generate excess supply over the next six years

  • Oil demand is being driven down by the transition to clean energy and shifts in China's economy

Spare capacity will push global oil supplies “towards levels unseen outside of the COVID crisis,” the agency said in Oil 2024, a market report that looks at oil’s impacts on trade, investment, refining operations and energy security.

While growing economies in India and Asia, increased demand for petrochemical production in China and greater demand for jet fuel will push oil usage higher, more electric car sales and increased fuel efficiency in gas-powered vehicles will ultimately decrease demand. Advanced economies, including the United States and Europe, are expected to use less oil annually.

The IEA forecasts that global oil demand will level off at about 106 million barrels per day in 2030. Current demand is about 102 million barrels per day.

Dramatic increases in oil production in the United States, Canada, Argentina and Brazil will generate excess supply through 2030, when supply capacity will reach 114 million barrels per day — 8 million more barrels per day than are needed.

“As the pandemic rebound loses steam, clean energy transitions advance, and the structure of China’s economy shifts, growth in global oil demand is slowing down and set to reach its peak by 2030,” IEA Executive Director Fatih Birol said in a statement.

The report’s oil glut projection, he said, suggests “oil companies may want to make sure their business strategies and plans are prepared for the changes taking place.”