Who is right about the future of oil? The International Energy Agency has predicted that global demand for oil, along with natural gas and coal, will peak this decade, in a historic turning point. US supermajors beg to differ. ExxonMobil’s purchase of shale producer Pioneer Natural Resources this month and Chevron’s deal this week to acquire Hess amount to the biggest consolidation in Big Oil for two decades. The tie-ups are a bet that the IEA’s vision of shrinking demand is wrong, or at least a bid to position these enlarged US giants among the last producers standing to meet the demand they believe will still exist by mid-century. In doubling down on oil, US groups are also widening the gap with European peers that have begun, tentatively, to embrace clean energy.

The IEA first published a pathway in 2021 to reach net zero emissions by 2050, and limit the global temperature rise to 1.5C above pre-industrial levels. This envisaged oil consumption falling 75 per cent from now to below 25mn barrels a day. Its latest central scenario, which assumes governments meet existing pledges on climate action but do no more, sees demand topping out before 2030, then dropping to about 55mn b/d in 2050. The agency’s most pessimistic scenario, under which countries plough on with today’s “stated policies”, would leave oil demand still at 97mn b/d by mid-century — but lead to a disastrous 2.4C of warming by 2100.

Assuming low-cost Opec producers and Russia keep output at similar levels to today, they would meet much of the 2050 demand in a net zero scenario. Producers elsewhere would be fighting for scraps. But if consumption is closer to the IEA’s central scenario — which, sadly for the planet, for now seems more likely — that would leave a fair bit even for higher-cost US producers to go at.