IEA's Flawed Premise - Electrified Transportation is Here, Like It Or Not

The future of oil demand; only one of these is realistic

The End of Oil's Growth: Peak Oil is Behind Us

The conventional wisdom regarding future oil demand, as offered by the International Energy Agency (IEA), is structurally flawed and fundamentally misaligned with market realities. While the IEA’s high-end projections (which shows demand sustained at 113 million barrels per day through 2050) may serve certain political or economic interests, they fail to account for the exponential rate of technological adoption. We here at carswithcords assert that peak global oil demand is already in the rearview mirror, and the accelerating adoption of EVs, including heavy-duty transport, guarantees a trajectory of irreversible decline far steeper than official forecasts suggest.

Institutional Inertia and Flawed Assumptions

The IEA's continued reliance on scenarios that imply sustained or rising oil demand is not a reflection of objective market analysis but rather a symptom of institutional inertia. Large forecasting bodies often face pressures, both internal and external, to avoid radical disruption in their outlooks. Specifically, the IEA is funded by 32 member countries, many of which export oil, which do not want to see projections of oil demand decline.

There are compelling reasons to believe the IEA methodologies are seriously flawed:

• Linear Modeling: High-end models often rely on linear extrapolations of historical growth rather than accounting for S-curve adoption, which characterizes every major technological transition from the internet to smartphones. Globally, EVs have passed the tipping point and are currently exhibiting this rapid, non-linear growth.
• Understated Policy Impact: The Stated Policies Scenario assumes governments will only fulfill their minimum obligations, ignoring the tendency for climate policy and regulation to accelerate once clean technology reaches (or surpasses) price parity.
• Opaque Economic Ties: The IEA forecasting body has a clear history of underestimating renewables growth while overstating fossil fuel resilience. This latest report appears to be no different from previous reports that were far from accurate pronostications.

By failing to model the full impact of the deflationary cost of clean technology, the IEA risks providing a misleading sense of security regarding future oil demand and prices. Essentially, the member nations are paying for reports that tell them what they want to hear, rather than an accurate projection.

The Evidence Confirming That Peak Oil Has Already Occurred 

We are not merely approaching peak oil; there's compelling evidence that suggests the moment of peak demand has already passed; even if minor fluctuations occur year-to-year, the trend is downward. This peak is not due to a shortage of supply, but a structural erosion of demand in the world's most developed markets. As the saying goes, "We didn't leave the Stone Age because we ran out of rocks." Similarly, we must transition away from oil while there are still supplies, or the transition will be devastating.

Key evidence supporting the claim of demand erosion includes:

Evidence Point	Impact on Oil Demand	Implication
China's Peak Fuel Use	China, the world's largest oil importer, has seen internal projections indicating its gasoline and diesel demand will peak this decade, driven by massive (internally supplied) EV adoption.	The largest engine of global oil demand growth is stalling.
OECD Demand Collapse	Oil consumption across advanced economies (OECD nations, including the US and Europe) has been either stagnant or in decline for years, a trend that is accelerating.	The transition is complete in early adopters and is moving to the early majority consumer base.
EV Displacement Rate	According to the IEA's own data, EVs displaced over 1.3 mb/d of oil demand in 2024. This number is not speculation; it is a measurable loss that will be higher in 2025.	Every new EV sale directly removes years of future oil demand.
Electrification of Heavy Transport	As electric semi-trucks begin to deploy, they target the massive diesel consumption of the commercial freight sector, ensuring the demand erosion extends beyond passenger cars.	The second-largest transport segment is now structurally exposed. Fleet managers want to move to vehicles with lower running costs.

The S-Curve of Light-Duty Vehicle Disruption

The passenger car market has decisively entered the exponential growth phase of the Sigmoid-curve, a hockey stick pattern where slow initial uptake gives way to a rapid surge in adoption. EVs are now entering the early majority mainstream, driven by technological improvements, falling battery costs, decades of infrastructure development, and (in most of the world) supportive government policies. This accelerated adoption rate confirms the market has reached a tipping point, backed by accelerated production and battery advancements. This shift is already having a material impact on fuel consumption. In 2024, the IEA itself estimated that the global EV fleet was already displacing over 1.3 million barrels of oil per day (mb/d).

This displacement is set to increase dramatically. In the IEA’s Stated Policies Scenario (STEPS), which only accounts for announced government targets, electric cars alone are expected to displace over 5 mb/d of oil demand globally by 2030. If adoption accelerates further due to price parity and more robust charging infrastructure, that displacement figure could rise even higher. Critically, every barrel of oil displaced by an EV represents a permanent, structural loss of demand for the oil market. This erosion of the largest single source of oil consumption (light-duty transport typically accounts for around a quarter of global oil demand) cannot be easily offset by demand in other sectors.

Electrifying Heavy Transport: The Next Frontier

While passenger cars dominate the current conversation, the next major wave of oil demand destruction is coming from heavy transport, specifically semi trucks. Commercial trucking has long been considered one of the most difficult sectors to decarbonize due to the high energy requirements for long-haul routes and heavy loads. However, rapid advancements in battery technology, supported by major investment in electric truck platforms from manufacturers, are making heavy-duty electrification a commercial reality.

The IEA anticipates that electric trucks and buses could displace nearly 1 mb/d of oil demand by 2030 in the STEPS scenario. If infrastructure investments in cross-continent electric charging corridors are made, this displacement will become far more pronounced. Further battery advancement, such as solid-state cells, will continue to challenge oil’s supremacy in hard-to-abate areas. This dual pressure, from passenger cars and heavy vehicles, compresses the timeline for oil demand erosion.

Scenario Comparison and Residual Demand

To understand the long-term consequences of accelerated electrification, it helps to compare the primary long-term oil demand of the three scenarios published by the IEA. Our market-driven accelerated electrification view pushes the market trajectory toward the low-demand end of the spectrum.

IEA Scenario Name	Primary Policy Assumption	Projected Global Oil Demand 2050 (Approx.)	Peak Year
Current Policies Scenario (CPS)	Only currently enacted policies.	113 million barrels per day	No peak before 2050
Stated Policies Scenario (STEPS)	All government targets and pledges.	Declining after peak	~2030
Net Zero Emissions (NZE)	A pathway to limit warming to 1.5°C.	24 million barrels per day	Already peaked

The name of the final scenario is misleading; even if all transportation were electrified, some oil demand would remain. The primary residual demand will come from petrochemical feedstocks, which are oil-based products used for plastics and other industrial purposes. This feedstock remains the most resilient source of demand; however, its growth is insufficient to offset the decline in transportation fuels. The total size of the petrochemical market cannot absorb the vast volumes of gasoline and diesel being eliminated by electric mobility.

In a scenario defined by technological acceleration, global oil demand is guaranteed to fall dramatically, validating the premise of a rapid transition. The future lies far closer to the IEA's low-end Net Zero Emissions projection with demand reduced to approximately 24 mb/d by 2050, rather than the inflated figures of their other models. To proceed with investment or policy based on the assumption of rising demand is to ignore the clear market signal of an industry already in structural, irreversible decline.