Under threat of losing U.S. funding, the International Energy Agency shifts from climate-based assumptions to market-driven models, projecting continued growth in oil and gas demand through 2050.
By yourNEWS Media Newsroom
The International Energy Agency (IEA) has reversed course on one of its longest-standing forecasts, abandoning the prediction that global oil demand would soon reach its peak. The shift follows what officials described as mounting pressure from the United States to restore objectivity in the agency’s modeling and remove assumptions tied to speculative net-zero policies.
In its newly released World Energy Outlook 2025—published during last month’s COP30 climate summit—the IEA no longer assumes nations will fully implement the Paris Agreement goal of net-zero emissions by 2050. Instead, it bases projections on actual, current policies. The result: oil and gas demand are now forecast to grow well into mid-century, ending more than a decade of “peak oil” scenarios.
“Looking at the world as it is, and then making baseline projections from there, is probably a much better starting point than assuming perfect compliance to global treaties,” said Alex Stevens of the Institute for Energy Research in an interview with Just the News.
U.S. Pressure and a Funding Threat
The reversal comes after Energy Secretary Chris Wright reportedly warned IEA Executive Director Fatih Birol that Washington would withdraw from the organization unless it ceased publishing ideologically driven forecasts. The U.S., which provides roughly one-fourth of the agency’s funding, made its concerns known earlier this year, according to Bloomberg and Reuters.
Sen. John Barrasso of Wyoming had already accused the IEA of “abandoning neutrality” in a 2023 Senate report that charged the agency with “cheerleading” the energy transition instead of providing balanced assessments. Barrasso’s report cited the IEA’s practice of modeling scenarios that assumed “perfect compliance” with global climate pledges despite consistent evidence that no major industrialized nation was meeting them.
According to The Honest Broker, the Substack publication of American Enterprise Institute fellow Roger Pielke Jr., the pace of global decarbonization remains far short of the targets laid out by the Paris pact. “The world is decarbonizing at an average rate of about 1.6% per year,” Pielke wrote. “To reach net zero by 2050, that rate would need to exceed 8%.”
From Advocacy to Analysis
Founded in 1974 after the Arab oil embargoes, the IEA was created to ensure energy security and provide policy-neutral forecasts. But over the past two decades, critics argue, it evolved into a quasi-advocacy body promoting aggressive decarbonization. The agency acknowledges this broader focus on its history page, citing a “wider mandate” that includes “climate change and decarbonization.”
Barrasso’s review detailed how the IEA’s modeling shifted over time—from the “Current Policies Scenario” (CPS) used between 2010 and 2019, to progressively more ambitious models such as the “Stated Policies Scenario” (STEPS) and “Announced Pledges Scenario” (APS). The latter assumed full implementation of every climate promise made by signatory nations, regardless of feasibility.
In 2024, the agency was forced to update its oil-demand projections four separate times to align with real-world data, according to the Institute for Energy Research.
A New Baseline: Oil Demand Rising
The 2025 World Energy Outlook reinstates CPS and STEPS as its core forecasting models. The IER reports that this approach aligns the IEA’s analysis with market-based projections from independent energy economists.
Under the CPS model, oil demand rises 13% to 113 million barrels per day by 2050, with markets well supplied by production in the United States, Canada, Guyana, Brazil, and Argentina. Even under the more conservative STEPS scenario, demand holds steady through 2030 before flattening. The report estimates that about 25 million barrels per day of new supply will be needed to maintain balance as older fields decline.
Liquefied natural gas demand also surges under both models. U.S. export capacity is projected to double from 150 billion cubic meters today to 300 billion by 2030, while Qatar’s output increases from 105 to 175 billion cubic meters. Global LNG demand could exceed 1 trillion cubic meters by 2050, driven largely by data centers and artificial intelligence workloads.
Reclaiming the Original Mission
Even with its methodological reset, the IEA’s forecasts show that the world remains far from meeting climate targets. Under STEPS, global emissions would still result in a 2.5°C temperature rise by 2100, while CPS projects an increase closer to 3°C.
Still, energy analysts view the return to baseline modeling as a sign that the agency is moving back toward its original role as an independent assessor rather than a political actor. “With anything modeling-wise, the assumptions you make drive the results,” said Stevens. “Moving to something more realistic produces more realistic results, and that’s exactly what we’re seeing.”
After years of climate-policy optimism that failed to match data, the IEA’s latest outlook signals a fundamental shift—away from aspirational forecasting and back toward the economic and geopolitical realities driving the world’s energy future.
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