US Vows To Quit IEA If The Agency Keeps Pushing Green Transition

Authored by Charles Kennedy via OilPrice.com,

• The U.S. is pressuring the IEA to shift focus from climate advocacy back to objective demand forecasting.

• Energy Secretary Chris Wright says withdrawal is an option if reforms aren’t made.

• The IEA’s forecasts clash with OPEC’s projection of rising oil demand through 2050.

The United States could abandon the International Energy Agency (IEA) if the organization, created in the aftermath of the 1970s Arab oil embargo, doesn’t return to forecasting energy demand without strongly promoting green energy.

“We will do one of two things: we will reform the way the IEA operates or we will withdraw,” U.S. Energy Secretary Chris Wright has told Bloomberg in an interview.

“My strong preference is to reform it,” Secretary Wright added.

The official echoes voices in the U.S. Republican party that the agency has become an advocate of the energy transition and is not objective in forecasting energy demand trends.

From ensuring security of supply after the 1970s embargo, the agency has shifted from this purpose in recent years to endorsing the net-zero by 2050 goal and is advocating for a major change in the global energy system to include more electric vehicles (EVs), renewable power supply, hydrogen, and all other low-carbon energy sources.

The IEA’s forecast that oil demand will peak this decade is “just total nonsense,” the U.S. official said, adding he has been talking to the IEA’s executive director Fatih Birol.

Reports emerged earlier this year that the Trump Administration is pushing the IEA to ditch its focus on the energy transition and promotion of renewable energy sources.

Last month, the IEA doubled down on its narrative that a peak in global oil demand is still on the horizon.

Annual global growth will slow from about 700,000 barrels per day (bpd) in 2025 and 2026 “to just a trickle over the next several years, with a small decline expected in 2030, based on today’s policy settings and market trends,” the IEA said in its annual Oil 2025 report for the medium term. 

In contrast to this, OPEC sees oil demand rising through 2050, with consumption expected at 123 million barrels per day (bpd) then, up from about 105 million bpd this year.

Last week, OPEC reiterated its view that there is no peak oil demand in sight.

The cartel has slammed the IEA in recent years for “dangerous” forecasts of imminent peak oil demand that would hurt consumers and “only lead to energy volatility on a potentially unprecedented scale.”