Oil could fall to around $25 a barrel by 2050 if the government reaches its target of eliminating energy sector emissions by mid-century. Reuters reports this, citing a study from the International Energy Agency. The forecast outlines how aggressive policy action, clean energy deployment, and efficiency gains would reshape crude markets over time. Governments around the world would push decarbonization, accelerate electrification, and tighten carbon controls, gradually shifting demand away from oil. For energy buyers, producers, and policymakers in Canada and the United States, the implications touch every corner of the market, from investment risk to price signalling and energy security planning.
Under a scenario based on current government policies, global oil demand is expected to reach record levels within the next six years, peaking at just under 102 million barrels per day. This projection reflects ongoing growth in major economies, continued demand for transport, industry, and power generation, and the pace at which efficiency measures are adopted. In such a path the balance between supply and demand will be sensitive to policy choices, economic conditions, and technological progress, with regions diverging in how quickly they reduce reliance on crude while others continue to rely on it for essential services.
After 2030, energy demand will begin to ease as transportation and power systems shift toward electrification and cleaner fuels. By 2035, demand could settle around 99 million barrels per day, a drop from the late decade peak driven by faster adoption of electric vehicles, improved vehicle efficiency, and stricter transport policies. In this scenario, oil prices are expected to move lower over time, with forecasts showing prices around 75 dollars per barrel in 2050 as demand growth slows and supply adjusts to a changing energy mix.
The day before, Brent crude traded below 75 dollars per barrel for the first time since early October, signaling a shift in market sentiment as traders price in a slower long term demand outlook and a more balanced supply picture. The move comes amid evolving inventory data, production decisions by major producers, and policy signals that could influence price trajectories in the coming years.
The oil market is forecast to run a surplus this year, with supply growth in some regions outpacing demand. Analysts point to the combination of higher output from non OPEC sources and a global move toward efficiency and alternative energy as factors shaping the balance. As always, the outlook remains contingent on policy developments, technological progress, and macroeconomic conditions that determine how much oil is used and how quickly producers adapt to these shifts.