IEA predicts that fossil fuels may become more affordable and plentiful.

According to the International Energy Agency, the transition to clean energy is expected to be expedited by governments, which could result in fossil fuels becoming substantially more cheap and abundant by the end of the decade.

The global energy watchdog has announced the dawn of a new energy era, in which countries have access to an abundance of oil, gas, and coal that exceeds their economic development requirements. This has resulted in reduced prices for households and businesses.

The influential annual outlook report of the Paris-based agency revealed that energy consumers may anticipate a period of “breathing space” in response to recent increases in global oil and gas prices, which were precipitated by geopolitical instability. This is due to the fact that investment in new fossil fuel projects has exceeded the global demand..

The report, according to Fatih Birol, the executive director of the IEA, affirms the organization’s prediction that the global consumption of fossil fuels will reach its maximum before 2030 and then undergo a permanent decline as climate policies are implemented. However, the IEA also stated that the market prices for oil and gas will decrease as a result of the ongoing investment in fossil fuel initiatives.

On Tuesday, oil prices declined below $74 due to the increasing apprehension regarding the sluggish demand from China.

The International Energy Agency (IEA) recognized that the Middle East’s conflict poses a threat to the near-term supply of oil and gas, which could disrupt the region’s hydrocarbon and gas exports. However, it stated that its long-term perspective indicates a “easing in underlying market balances” and “lower prices on the horizon.”

According to the International Energy Agency’s central forecast, global oil prices may reach a plateau of $75 to $80 per barrel by the end of the decade. This is in contrast to the average price of just over $100 per barrel in 2022, which was the result of Russia’s invasion of Ukraine.

The IEA anticipates that the price of gas imported into the EU will decrease from a record average high of over $70 (£54) per million British thermal units (MBtu) in 2022 to $6.50 (£5) by the end of the decade, as a result of a recent surge in planned gas projects.

As a result of Russia’s invasion of Ukraine, there was a significant increase in investment in the export of liquefied natural gas (LNG) via ships, which significantly reduced the import of Russian gas into Europe via pipelines. The International Energy Agency (IEA) predicts that the global LNG capacity will increase by nearly 50% by 2030, surpassing the anticipated global demand in all three of the agency’s simulated scenarios.

China, the world’s largest oil importer, is “wrong-footing” major oil producers by rapidly transitioning to electric vehicles, which could result in future supplies surpassing global oil demand growth due to the increasing production of crude oil from new oil projects in the United States, Canada, and South America, according to the IEA.

Under the IEA’s central forecast scenario, electric vehicles are presently accounting for approximately 20% of all new car sales worldwide. This figure is expected to increase to 50% by 2030, a level that has already been achieved in China this year. According to the International Energy Agency (IEA), this would reduce the global demand for crude by approximately six million barrels per day.

Birol stated that the “new world” for energy consumers will be more economically comfortable. However, he cautioned that the transition will necessitate the cost-effectiveness of green alternatives, such as electric vehicles and heat generators, in order to compete with more affordable fossil fuels.

The International Energy Agency (IEA) has forecast that the demand for sustainable electricity sources will continue to increase in the years ahead, contributing the equivalent of Japan’s power demand to the global total electricity consumption annually in a scenario based on the current policy framework. The IEA stated that this demand would increase even more rapidly if governments implement new policies that are consistent with the global objective of achieving net zero emissions.