Will 'New' IEA Scenario Change Oil Market Views?

Can the return of the International Energy Agency's (IEA) Current Policies Scenario (CPS) in its flagship World Energy Outlook (WEO) help lift investor sentiment toward the oil industry? Some argue the return of this "business-as-usual" scenario will have far-reaching impacts in policymaking and investment circles because it will show oil demand continuing to grow to 2050 — similar to Opec's long-term outlook — and won't center on demand peaking before 2030, as current IEA scenarios do. But it's hard to say if the CPS can unleash more oil and gas investment — it is predicated on current energy market policies not materially changing over the next quarter century and discounts ongoing decarbonization efforts. Some see it as a counterweight to the IEA's Net Zero by 2050 (NZO) scenario, which stirred controversy when it was released in 2021. Most agree, however, that CPS will provide a more complete, balanced view from the IEA. The pending CPS, which will land in next month's WEO for 2025, reportedly shows global oil demand rising to 114 million barrels per day by 2050, up from around 103 million b/d in 2024. That compares to 93 million b/d by 2050 under the 2024 Stated Policies (Steps) scenario. Steps, which makes projections based on existing energy policies and those that are under development, has been the IEA's most conservative benchmark since the agency dropped CPS in 2020. IEA critics, including the US Trump administration, have pushed for the return of CPS, arguing the agency had moved into climate advocacy by dropping it and has been promoting less oil-friendly scenarios — particularly NZO — in recent years.