Global energy markets face a pivotal decade as the International Energy Agency projects fossil fuel demand will reach its zenith by 2030, marking a historic shift in the world's energy consumption patterns. Under the agency's Stated Policies Scenario, oil demand is expected to peak at 102 million barrels per day before beginning a gradual decline, while coal consumption faces an even earlier peak before the decade's end.

The transformation is primarily driven by the rapid electrification of transportation and the unprecedented expansion of renewable energy capacity. Solar and wind power are projected to nearly triple their electricity generation capacity by 2035, fundamentally altering the global energy mix. Electric vehicle adoption represents a critical factor, with EV market share expected to surge from 20% currently to over 50% by 2035, potentially displacing 10 million barrels per day of oil demand.

However, the agency has reintroduced its Current Policies Scenario after a five-year hiatus, reflecting growing uncertainties in the global policy environment. This alternative projection paints a starkly different picture, forecasting a 13% increase in fossil fuel consumption by 2050 if countries fail to implement promised climate policies. The scenario accounts for potential policy reversals and slower clean energy adoption rates, particularly in light of changing political landscapes.

Natural gas presents a more complex trajectory, with demand continuing to grow approximately 1% annually through 2035 before stabilizing. This sustained growth is supported by massive liquefied natural gas infrastructure expansion, with 300 billion cubic meters of new LNG capacity scheduled to come online by 2030, representing a 50% increase in global supply. The United States leads this expansion, contributing half of the new capacity additions.

For energy traders and analysts, these projections signal fundamental shifts in commodity markets and investment flows. The timing and magnitude of fossil fuel demand peaks will significantly impact pricing dynamics, while the renewable energy surge creates new opportunities in clean technology sectors and grid infrastructure investments.