Global oil demand will not peak until 2032, two years later than earlier thought, consultancy Wood Mackenzie has said in a report, blaming continued momentum on the use of hydrocarbons for transport and petrochemicals.
Rising dependence on fossil fuels due to increased power demand from artificial intelligence and to geopolitical tensions have led to 2050 net zero goals becoming unattainable, Wood Mackenzie said in its Energy Transition Outlook report.
The report comes ahead of the COP30 meeting in Brazil this month where countries are due to present updated national climate commitments and assess progress on renewable energy targets.
Demand for liquid hydrocarbons is expected to peak at 108 million barrels per day in 2032 with natural gas demand remaining resilient well into the 2040s, the report said.
In China, oil demand stood at 16 million bpd in 2025, but rising electric vehicle adoption could lead to demand falling by 35 per cent by 2060, the report said. However, India, Southeast Asia and Africa remain key drivers of oil demand growth.
A Wood Mackenzie analysis suggested that limiting global warming to 2 degrees Celsius would require $4.3 trillion in annual investment between 2025-2060 – an increase of 30 per cent from current levels – to reach net zero emissions by around 2060.
Energy sector investment would therefore need to grow from 2.5 per cent of global Gross Domestic Product (GDP) today to 3.35 per cent within the next decade.
“Fossil fuels are no longer uncontested; they are being squeezed into narrower roles, but their decline is proving more gradual than expected,” the Wood Mackenzie report said.
Displacing fossil fuels with renewable power is a pillar of the energy transition that seeks to meet the Paris Agreement target to limit global temperature rises to 1.5 C (2.7 F) above preindustrial levels. The slower pace of energy transition and stronger-than-expected crude demand are making this shift harder.
Meanwhile OPEC+ on Sunday agreed a small oil output increase for December and a pause in increases in the first quarter of next year as the producers’ group moderates plans to regain market share due to rising fears of a supply glut.
OPEC+ has raised output targets by around 2.9 million barrels per day – or around 2.7 per cent of global supply – since April, but slowed the pace from October amid predictions of a looming oversupply.
New Western sanctions on OPEC+ member Russia are adding to challenges in the strategy, as Moscow may struggle to further raise output after the U.S. and Britain imposed new measures on top producers Rosneft and Lukoil.
On Sunday, the eight OPEC+ members taking part in the group’s monthly meeting – Saudi Arabia, Russia, the United Arab Emirates, Iraq, Kuwait, Oman, Kazakhstan and Algeria – agreed to increase December output targets by 137,000 barrels per day, the same as for October and November, Reuters reported.
“Beyond December, due to seasonality, the eight countries also decided to pause the production increments in January, February, and March 2026,” the group said in a statement.
Oil prices fell to a five-month low of about $60 a barrel on October 20 on concerns that a glut was building, but have since recovered to about $65 a barrel on Russian sanctions and optimism over U.S. talks with trade partners.
January to March is the weakest quarter for oil demand and supply balances, and by pausing OPEC+ is showing it is proactively managing the market, said Amrita Sen from Energy Aspects.
OPEC+ had been reducing output for several years until April and cuts had peaked in March, amounting to 5.85 million bpd in total.
The reductions were made up of three elements: voluntary cuts of 2.2 million bpd, 1.65 million bpd by eight members and a further 2 million bpd by the whole group.
The group has been unwinding voluntary cuts, while the last element of the cuts for the whole group is meant to stay in place until the end of 2026. Eight OPEC+ members will meet again on November 30, the same day as a full OPEC+ meeting, the Reuters report said.
Emmanuel Addeh
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