The International Energy Agency (IEA) has become a dishonest broker of information because of its renewable energy bias. This week, it reported that there will be a staggering oil glut by the end of the decade.
“Total supply capacity is forecast to rise to nearly 114 million barrels a day by 2030 – a staggering 8 million barrels per day above projected global demand…This would result in levels of spare capacity never seen before other than at the height of the Covid-19 lockdowns in 2020.”
It’s important to clarify that the surplus in question pertains to spare capacity, not actual supply. Spare or excess oil capacity arises from production exceeding demand. Understanding the oil supply-demand balances that lead to excess capacity is critical.
Reproducing the IEA’s projections to 2030 from its Oil 2024 report was challenging because it did not include OPEC oil supply data for the projection period (Figure 1). Omitting a third of the world’s supply is significant and makes IEA’s conclusions difficult to verify. When comparing data from OPEC, discrepancies were found in the 2022 and 2023 data compared to IEA’s table.
Figure 2 shows that the IEA’s projected oil supply-demand surplus of 6.3 million barrels of oil per day (mmb/d) by 2030 is nearly seventy times greater than the average projections from OPEC and the U.S. Energy Information Administration (EIA) for the same period.
This significant discrepancy raises a red flag, suggesting potential issues with the IEA’s calculations, assumptions, or both. In two decades of monitoring these three agencies, I’ve never encountered a discrepancy of this magnitude.
OPEC and EIA expect supply and demand to be near balance after 2025.
Source: IEA, OPEC, EIA & Labyrinth Consulting Services, Inc.
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