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OPEC and IEA chief at odds over global demand for oil, gas and coal

Oil producers took issue with a prediction by the energy agency's chief that demand for fossil fuels will peak by 2030.

The move away from fossil fuels isn't happening fast enough.
The move away from fossil fuels isn't happening fast enough. (AN/JJ Ying/Unsplash)

Oil cartel OPEC criticized a forecast by the International Energy Agency's executive director saying global usage of fossil fuels will peak by 2030.

The Vienna-based organization of mainly Middle Eastern and African oil-producing nations said on Thursday it finds IEA Executive Director Fatih Birol's assessment to be "ideologically driven, rather than fact-based."

Birol wrote an op-ed article published in the Financial Times on Tuesday that the so-called Golden Age of Gas "is nearing an end" this decade.

New IEA projections show the world "is on the cusp of a historic turning point," he wrote. "Based only on today’s policy settings by governments worldwide — even without any new climate policies — demand for each of the three fossil fuels is set to hit a peak in the coming years."

The projections are due to be published in Paris-based IEA’s next annual World Energy Outlook in October. Birol said the expected declines in fossil fuels will be historic but won't fulfill the Paris Agreement's preferred limit of no more than 1.5° Celsius of global warming above pre-industrial levels.

OPEC, however, countered that "consistent and data-based forecasts" show otherwise. It said any suggestion the fossil fuel era is close to ending is risky, because it would encourage unrealistic calls to stop any new oil and gas project.

“Such narratives only set the global energy system up to fail spectacularly," said Haitham al-Ghais, OPEC's secretary general. "It would lead to energy chaos on a potentially unprecedented scale, with dire consequences for economies and billions of people across the world."

Speed of decarbonization in dispute

It's not the first time this year that IEA and OPEC have gotten their wires crossed.

In April, OPEC cautioned IEA against undermining new investments in oil and gas projects while Birol urged OPEC not to adhere to policies that boost crude prices and add to inflationary pressures that harm poorer nations.

The two international organizations also differ over how to decarbonize energy. OPEC favors an approach that puts energy security first. IEA, which is mainly supported by the 38-nation Organization for Economic Cooperation and Development, or OECD, says a faster approach is needed with steep decreases in oil, gas and coal usage.

In April 2021, it advised governments that an immediate and massive transformation of all energy systems will be needed to stick to get to net zero carbon emissions by 2050 and give the world a chance of sticking to the 1.5° limit.