While the global demand for electricity has reached record highs, driven by the electrification of transport and the expansion of data centers, oil continues to hold a significant position in the global energy mix. According to an article published in Ekspert, despite the increasing attention to renewable energy sources (RES) and nuclear energy, oil is not losing relevance as quickly as some projections suggest.
A Surge in Electricity Demand
The International Energy Agency (IEA), in its Global Energy Review, reports a noticeable acceleration in global energy demand. In 2024, electricity consumption grew by 2.2%, outpacing the average rate of the previous decade (1.3% annually between 2013 and 2023). This surge was primarily driven by electrification trends and data center expansion, and largely met through RES and nuclear power.
Electricity generation increased by 4.3% in 2024, marking the sharpest rise on record, excluding post-recession recoveries. However, the rapid growth of renewable sources is underpinned by significant subsidies and the role of China’s economy, which alone accounts for nearly two-thirds of global wind and solar capacity additions. The IEA warns that without subsidies, the momentum of renewables could slow considerably.
In Europe, the replacement of aging renewable infrastructure is emerging as a critical challenge, requiring intensified investment. The expansion of nuclear power, particularly in Russia, is also seen as a promising solution, though its contribution remains modest—less than 5% of primary energy and under 10% of electricity production globally.
Oil’s Continued Relevance
Contrary to the narrative of declining oil demand, the IEA notes that in 2024, global oil consumption still grew—albeit modestly—by 0.8%, down from 1.9% in 2023. Importantly, the share of oil in global energy consumption dropped below 30% for the first time in 50 years, compared to its peak at 46%. However, experts argue that this does not necessarily indicate oil’s obsolescence.
According to Alexander Frolov of the InfoTEK analytical center, the apparent decline is partly misleading. The surge in oil demand in 2023 was among the highest in the last 15 years, largely due to postponed consumption in China following COVID-related restrictions. Moreover, current global oil consumption exceeds 100 million barrels per day, compared to 60–70 million barrels daily in the 1970s.
Discrepancies between IEA and OPEC data further complicate the picture. While OPEC estimates 2024 oil demand growth at 1.5%, the IEA suggests just 0.8%. These methodological differences, especially after the IEA removed OPEC from its list of sources in 2022, highlight a growing rift between the organizations.
Frolov emphasizes that OPEC’s data, which directly reflects production metrics, is more reliable. The IEA’s models are seen as too narrowly focused, primarily on European markets, and potentially influenced by policy agendas.
Europe’s Energy Crisis and Demand Recovery
Energy demand in Europe remains below pre-crisis levels, driven by persistent high prices for gas and electricity. The energy crisis, exacerbated by geopolitical tensions and the EU’s shift away from Russian energy supplies, continues to impact the region. In 2024, EU electricity consumption stood at 2,440 TWh, down from 2,617 TWh in 2017—equivalent to a reduction of about 1.5 times Ukraine’s annual electricity usage.
The IEA attributes Europe’s significant reduction in greenhouse gas emissions (–2.2% in 2024) largely to this crisis, rather than the success of green transition policies. The ongoing economic impact of the 2009 financial crisis, combined with more recent energy shocks, has stalled a full recovery in energy demand.
China’s Balanced Approach
In contrast, China is emerging as a model for managing energy development and emissions control. In 2024, global emissions increased by just 0.8%—down from 1.2% in 2023—thanks largely to reductions in developed nations and stabilization efforts in China. While China’s emissions rose by 0.4%, this is significantly lower than previous years and occurred alongside strong economic growth (+5%).
China’s approach includes a diverse mix of energy sources: wind, solar, gas, nuclear, and coal. The country has also been modernizing its coal-fired power plants since 2019, increasing their efficiency and reducing emissions per unit of electricity. This strategy enables China to expand energy production while limiting the environmental footprint.
Frolov highlights that China’s balanced energy policy contrasts with the trend in some Western countries to decommission fossil-fuel-based infrastructure entirely. He argues that enhancing efficiency is more effective than outright closures in reducing emissions.
Energy Transition Without Premature Conclusions
Despite optimistic projections about a swift global shift toward renewables, the data reveals a more complex reality. The rise in electricity demand, the persistent role of oil, and regional disparities in energy consumption growth underscore that the global energy transition is far from linear.
While RES and nuclear energy are gaining ground, oil continues to be a vital component of the global energy landscape. Structural changes—such as China’s technological advancements, Europe’s crisis-driven reductions, and ongoing demand in developing economies—suggest that energy strategies must remain flexible and grounded in empirical data.
The contrasting assessments by the IEA and OPEC point to a broader debate about the pace and direction of global energy change. What remains clear is that oil, despite its declining share, is not disappearing anytime soon.
