Exposing the IEA’s Blind Spot

We knew it was only a matter of time before the IEA had its “Come to Jesus” moment regarding future oil demand. 

And you can bet that history has a way of embarrassing forecasters, especially those who believe the present moment offers a clean view of the future. Last week, the IEA joined that long tradition of badly aged oil predictions. 

Some of you might remember back in the late 1970s when energy planners declared that global oil demand had reached its permanent ceiling. 

They argued that efficiency gains and economic restructuring meant consumption would decline from there on. Except, what actually took place was an unprecedented growth in global oil demand. 

The same script is playing out today. 

For years, the IEA insisted oil demand would peak around 2030 and begin its long descent. Every time Fatih Birol echoed that absurd notion, we could only laugh helplessly as the market embraced the projection as scripture and caused a crude sell-off. 

Oh, have the tables turned, dear reader…. And the IEA finally admitted what we knew all along — their cries of peak demand was nothing but utter bullshit. 

Rewriting the IEA Narrative

In its World Energy Outlook 2025, the IEA now projects global oil demand rising from 100 million barrels per day in 2024 to 105 million barrels per day in 2035, before reaching 113 million barrels per day by 2050. 

Yet, the most striking part of this revision is that the world is already about to exceed 104 million barrels per day by the time we ring in the New Year.

Is it me, or is it simply a matter of time until the IEA has to go back and do a little more revising? This isn’t a minor oversight. It’s a sign that the IEA’s entire demand curve has been dragged upward by reality faster than its models can adjust. 

Still, crude remains stubbornly cheap, as if demand is waning and supply is plentiful. 

Markets are treating a tight, strengthening system as if it were collapsing under the weight of its own abundance.

Cheap Oil, Expensive Consequences

On the supply side, the cracks will soon begin to widen. 

The IEA expects non-OPEC producers (led by the U.S., Canada, Guyana, Brazil, and Argentina) to add four million barrels per day by 2035. 

After that brief rise, the next assumption is for it to fall back to 2024 levels by mid-century — an odd reversal given its own demand projections.

But did you catch the sleight of hand lying in this report? A little magical flick of the wrist that most don’t realize. Notice that the IEA isn’t talking about crude oil, but rather “total liquids production” in its report, which bundles crude oil with condensate, NGLs, and refinery gains. 

That’s why they can inflate the United States’ output number to 21 million barrels per day. Actual crude oil production, however, sits around 13.8 million barrels per day, which is still an impressive feat. 

What the IEA isn’t highlighting is the fact that our wells are becoming gassier as drillers move away from their Tier-1 acreage. Of course, that’s not to mention the fact that decline curves are sharp, capital spending needs to stay high, and the reduced number of rigs deployed in the field is going to have to rise for any hope of seeing production grow over the next decade. 

Meanwhile, demand engines in China and India remain nowhere near their peak. U.S. consumption is steady, petrochemical demand is rising, and aviation continues its post-pandemic recovery; every component that was supposed to weaken has instead strengthened.

You see, cheap oil prices come with a curse. They delay investment, slow drilling, and accelerate the moment when supply can no longer keep pace. 

When that imbalance snaps into view, it doesn’t correct gradually — it’ll send shockwaves through the market.

Look, it’s this simple — the longer oil stays cheap, the larger the future supply crisis becomes.

It’s happened before, and it’s about to happen again. 

Stay tuned, because there’s more to this oil rebound than the IEA coming to grips with reality.