OPEC and IEA - Behind the conflicting oil forecasts

VTV.vn - OPEC and the IEA have issued conflicting forecasts on oil demand, reflecting differences in interests, roles, and approaches to the global energy transition.

The Organization of Petroleum Exporting Countries (OPEC) has released its World Oil Outlook report, forecasting that global oil demand will increase by up to 23% by 2025. However, OPEC's report contradicts the forecast of the International Energy Agency (IEA), which predicts a large oversupply in the market next year, with demand growth slowing and peaking around 2029-2030 before declining. So why do these energy organizations' forecasts contradict each other?

According to OPEC's latest forecast released yesterday, oil will continue to be the single largest energy source until 2050, accounting for nearly 30% of the total global energy mix. Meanwhile, the International Energy Agency's (IEA) forecast is completely opposite to OPEC's.

Looking back, in 1960, the Organization of Petroleum Exporting Countries (OPEC) was founded with a very clear objective: to coordinate production and drive oil prices higher. Today, OPEC has 12 member countries, and the objective remains the same.

Professor Jeff Colgan, Director of the Climate Solutions Lab at Brown University, commented: "OPEC has a clear political agenda. They represent oil producers, primarily in developing countries. But the future of oil demand now depends heavily on political decisions – especially the pace of carbon emission reductions."

Meanwhile, OPEC's counterpart is the International Energy Agency (IEA), established in 1974 with 32 industrialized nations as full members. This organization primarily represents developed economies , acting as an associate agency of the OECD.

The conflicting forecasts between OPEC and the IEA stem from differences in the missions and roles of the two agencies. OPEC typically provides high and sustained oil demand forecasts for several decades, as this would drive up oil prices and benefit its members. The IEA, on the other hand, only forecasts that global oil consumption will peak at the end of this decade, based on government policies aimed at reducing CO2 emissions. So, who is right?

Narendra Taneja, President of the independent Energy Policy Institute, stated: "Both are wrong. You see, the International Energy Agency is an agency of developed countries. The IEA's forecast that oil demand will peak in 2029 is unscientific."

"The adoption of electric vehicles and renewable energy technologies like solar and wind power is currently the cheapest form of energy in most parts of the world. Therefore, market trends are driving us toward these forms of clean energy use," said Rachel Cletus of the Union of Concerned Scientists.

As renewable energy becomes increasingly affordable, the peak of oil production may arrive sooner than expected. But political and market considerations will determine the pace of that transition.

Source: https://vtv.vn/opec-va-iea-dang-sau-nhung-du-bao-trai-chieu-ve-dau-mo-100251216054524441.htm