Oil's share in global energy use falls below 30% in 2024: IEA

The share of oil in global energy demand fell below 30% for the first time in 2024, with the world returning to slower oil demand growth after the pandemic recovery, and oil consumption led by aviation and petrochemical feedstock needs, the International Energy Agency said March 24.

In its annual Global Energy Review, the IEA said "structural economic trends" had reasserted themselves in 2024, and added the slowdown in demand was partly due to relatively stable oil prices, alongside post-pandemic normalization.

The review reiterated the IEA's view that global GDP trends have been decoupling from CO2 emissions, with the latter rising 0.8% in 2024 while the global economy grew more than 3% -- emissions were constrained by the rise of renewables and low-carbon technologies such as heat pumps in heating, it said.

The IEA reiterated its estimate that global oil demand grew 830,000 b/d in 2024, down from 2.1 million b/d in 2023. The 2024 growth estimate is a shade under the estimate of 900,000 b/d from analysts at S&P Global Commodity Insights.

Oil's share of total energy consumption had taken 50 years to fall from a peak of 46% to below 30%, it added.

Consumption drivers

Growth in oil demand for road transport has slowed significantly, accounting for 5% of oil demand growth since 2022 thanks to the rise of electric vehicles and alternative fuels such as LNG in trucking, the IEA said.

US oil demand was flat in 2024 and 4.3% lower than in 2019 thanks to the rise of working from home, which has constrained gasoline use for commuting, the IEA said. For the whole of the OECD advanced economies, oil demand was 5.4% below the 2019 level, it said.

China's oil use grew by just 0.8% in 2024, a significant slowdown, with growth concentrated in petrochemical feedstock demand as alternative transportation types have eaten into demand, the IEA said.

The IEA forecasts demand growth of just over 1 million b/d in 2025 in its latest monthly oil market report, compared with a forecast of 1.3 million b/d by Commodity Insights.

With overall energy demand estimated to have risen 2.2% in 2024, electricity accounts for the bulk of that consumption growth, with increases in generation derived from gas, coal, nuclear and renewables, IEA Executive Director Fatih Birol said.

"Electricity use is growing rapidly, pulling overall energy demand along with it to such an extent that it is enough to reverse years of declining energy consumption in advanced economies. The result is that demand for all major fuels and energy technologies increased in 2024, with renewables covering the largest share of the growth, followed by natural gas," he said.

The demand-focused review steered clear of discussing investment requirements, after the IEA came in for heavy criticism for its perceived warnings against new upstream oil and gas investment on the path to global net-zero emissions.