HSE & Sustainability

IEA Reveals 10-Point Plan To Cut Oil Demand Quickly

With Russia’s invasion of Ukraine resulting in lower supplies to oil markets ahead of peak demand season, the International Energy Agency has released a plan that it says can cut global oil demand by 2.7 million BOPD, easing strains and price pain.

Source: IEA.

In the face of the emerging global energy crisis triggered by Russia’s invasion of Ukraine, practical actions by governments and citizens in advanced economies and beyond can achieve significant reductions in oil demand in a matter of months, reducing the risk of a major supply crunch, according to an analysis released by the International Energy Agency (IEA).

These efforts would reduce the price pain being felt by consumers around the world, lessen the economic damage, shrink Russia’s hydrocarbon revenues, and help move oil demand toward a more sustainable pathway.

If fully carried out in advanced economies, the measures recommended by the IEA’s new 10-Point Plan to Cut Oil Use would lower oil demand by 2.7 million BOPD within four months—equivalent to the oil demand of all the cars in China. This would significantly reduce potential strains at a time when a large amount of Russian supplies may no longer reach the market and the peak demand season of July and August is approaching. The measures would have an even greater effect if adopted in part or in full in emerging economies as well.

The report includes recommendations for decisions to be taken now by governments and citizens to transition from the short-term emergency actions included in the 10-Point Plan to sustained measures that would put countries’ oil demand into a structural decline consistent with a pathway toward net zero emissions by 2050.

Because the majority of oil demand comes from transport, the IEA’s plan focuses on how to use less oil getting people and goods from A to B, drawing on concrete measures that have already been put to use in a diverse range of countries and cities. The short-term actions it proposes include reducing the amount of oil consumed by cars through lower speed limits, working from home, occasional limits on car access to city centers, cheaper public transport, more carpooling and other initiatives—and greater use of high-speed rail and virtual meetings instead of air travel.

“As a result of Russia’s appalling aggression against Ukraine, the world may well be facing its biggest oil supply shock in decades, with huge implications for our economies and societies,” said IEA Executive Director Fatih Birol, who launched the plan at a news conference with Barbara Pompili, the minister for the ecological transition of France, which currently holds the presidency of the European Union.

“IEA Member Countries have already stepped in to support the global economy with an initial release of millions of barrels of emergency oil stocks, but we can also take action on demand to avoid the risk of a crippling oil crunch,” Birol said. “Our 10-Point Plan shows this can be done through measures that have already been tested and proven in multiple countries.”

“France and all European countries must get out of their dependence on fossil fuels, in particular on Russian fossil fuels, as soon as possible,” Pompili said. “It is an absolute necessity, for the climate but also for our energy sovereignty. The plan proposed today by the IEA offers some interesting ideas, some of which are in line with our own ideas to reduce our dependence on oil.”

Advanced economies account for almost half of global oil demand. Many of them, including the largest energy consumers, are required as members of the IEA to have oil demand restraint plans ready as part of their emergency response measures.

Most of the proposed actions in the plan would require changes in the behavior of consumers, supported by government measures. How and if these actions are implemented is subject to each country’s own circumstances—in terms of their energy markets, transport infrastructure, social and political dynamics, and other aspects.

Ultimately, however, reducing oil demand does not depend solely on national governments. Several of the measures can be implemented directly by other layers of government—such as state, regional, or local—or just voluntarily followed by citizens and corporations, enabling them to save money while showing solidarity with the people of Ukraine.

The IEA report notes that reducing oil use must not remain a temporary measure. Sustained reductions are important not only to improve countries’ energy security but also to tackle climate change and reduce air pollution. Governments have all the necessary tools at their disposal to put oil demand into decline in the coming years, and the report sets out the key ones to achieve this goal, including hastening the adoption of electric vehicles, raising fuel economy standards, boosting alternative fuel supplies, accelerating heat pump deployment, and producing and consuming plastic more sustainably.

The reports 10 key actions are

  • Reduce speed limits on highways by at least 10 km/h—This would save around 290,000 BOPD use from cars and an additional 140,000 BOPD from trucks.
  • Work from home up to 3 days a week where possible—One day a week saves around 170,000 BOPD; three days saves around 500,000 BOPD.
  • Car-free Sundays in cities—Every Sunday saves around 380,000 BOPD; one Sunday a month saves 95,000 BOPD.
  • Make the use of public transport cheaper and incentivize micromobility, walking, and cycling—This would save around 330,000 BOPD
  • Alternate private car access to roads in large cities—This would save around 210,000 BOPD.
  • Increase car sharing and adopt practices to reduce fuel use—This would save around 470,000 BOPD.
  • Promote efficient driving for freight trucks and delivery of goods—This would save around 320,000 BOPD.
  • Using high-speed and night trains instead of planes where possible—This would save around 40,000 BOPD.
  • Avoid business air travel where alternative options exist—This would save around 260,000 BOPD.
  • Reinforce the adoption of electric and more-efficient vehicles—This would save around 100,000 BOPD.

These effects are short term and reflect implementation in advanced economies where feasible and culturally acceptable.
Read the report here.