IEA: Current oil glut temporary; future demand will soar

DESPITE what appears to be a saturated oil market in 2014, oil producers around the world will struggle to meet rising demand over the next few decades.

In its latest annual World Energy Outlook (WEO), the International Energy Agency (IEA) warned that the current period of oil abundance may be fleeting and, in fact, without heroic levels of production increases, oil markets will grow dangerously tight in the coming years.

Global oil demand is expected to increase by 37 per cent by 2040, with a dominant proportion of that coming from developing countries - ie, China and India. In fact, the IEA says that for every barrel of oil the industrialised world expects to eliminate from demand through efficiency or other ways of reducing demand, developing countries will burn through two additional barrels.