The International Energy Agency (IEA) has published its annual World Energy Outlook, extending predictions to 2050. A significant change in their forecast indicates that oil demand will not peak at the end of this decade. In the Current Policies Scenario, oil demand is expected to grow until 2050, finishing 13% higher than last year’s estimate. This increase is attributed to a slower shift towards electric vehicles. However, in the Stated Policies Scenario, oil demand may peak by 2030 if more proactive policies are implemented.

Revised Outlooks Aligned

This updated outlook closely matches OPEC’s forecast, which also sees rising oil demand through 2050. However, OPEC predicts oil demand will be about 10 million barrels per day higher than the IEA’s figure by the end of the forecast period. The FXStreet Insights Team gathers key market observations from experts, combining commercial insights and analyst perspectives. There’s a significant change in the long-term energy outlook, with both the IEA and OPEC expecting oil demand to increase for longer than previously thought. This new agreement suggests demand could rise until 2050 in certain scenarios, moving away from the earlier idea that demand would peak this decade. The main reason for this shift is the slower-than-expected global transition to electric vehicles. Supporting this long-term forecast are recent short-term data points. In the third quarter of this year, global EV sales hit 19%, falling short of the expected 23% due to high interest rates and ongoing battery supply chain problems. Additionally, both the UK and France have postponed their deadlines for ending sales of combustion engine vehicles, as announced in September.

Demand Remains Strong

Demand remains very strong, especially as we approach winter. U.S. air travel during the recent Veterans Day weekend surpassed pre-pandemic 2019 levels for the first time, indicating strong jet fuel consumption. coupled with unexpectedly strong industrial production in India and Southeast Asia, it’s becoming harder to argue that demand is weakening. We recall a similar shift in the market back in 2017-2018, when concerns over a supply glut faded and prices began to rise steadily. This new agreement between the IEA and OPEC regarding future demand could break a psychological barrier that has kept oil prices low. It suggests that price drops might be seen as buying opportunities rather than the beginning of a downward trend. Looking ahead, this boosts the case for bullish positions. We find value in buying call spreads on Brent crude for February 2026, aiming for upward price movement in the new year while managing our risk. Selling out-of-the-money puts on WTI for January 2026 also appears attractive, as this new long-term support should protect against significant short-term sell-offs. We will monitor the upcoming weekly EIA inventory reports for indications of tightening crude stocks to back up this thesis. The most crucial factor, however, will be the OPEC+ meeting in early December. Any statement reaffirming their commitment to production discipline will significantly enhance this revised bullish outlook. Create your live VT Markets account and start trading now.

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