- Reuters this week reported that the divergence between IEA and OPEC demand numbers is the largest in 16 years.
- The IEA predicted last year that oil demand would peak before 2030.
- OPEC has a vested interest in stronger global demand, so there may well be an overestimation bias in its outlooks.
Ever since the International Energy Agency switched from a pure-play information provider to an advocate of the energy transition, its forecasts about oil demand have shifted to increasingly reflect this advocacy. This has led to a growing divergence between the IEA’s and OPEC’s outlooks on the future of the commodity, increasing the risk of confusion among analysts and investors. The question “Who’s right?” has become a legitimate one. To begin with, it’s worth noting that neither authority is completely impartial. OPEC has a vested interest in stronger global demand, so there may well be an overestimation bias in its outlooks. The IEA, on the other hand, acts like it has a vested interest in the energy transition, which has led it to regularly underestimate oil demand, with its most marked departure from reality to date contained in the original Net Zero Roadmap. NN: Their is plenty of proof global is plunging. That is why OPEC is trying to cut production.