Wood Mackenzie sees peak energy demand by 2035 as fertility decline reshapes consumption
Demographic decline could cap global energy demand growth and shift the mix toward electricity, testing long-term hydrocarbon forecasts.
China’s population fell by 3.4 million in 2025 and global fertility rates dropped to 2.2 births per woman, close to the 2.1 replacement ratio, according to Wood Mackenzie research published in July. The consultancy now sees global primary energy consumption rising 8% from current levels to a peak of 717 exajoules by 2035, then declining to 672 EJ by 2060.5
That matters for traders who have built long-dated positions around decades of uninterrupted demand growth. Wood Mackenzie’s trajectory implies peak hydrocarbons arrive a full generation earlier than most supply-side models assume, and the decline phase after 2035 is not marginal.5
The demographic signal cuts both ways. Wood Mackenzie said the shift could support electricity and critical mineral demand while creating a structural move away from hydrocarbons, noting that a lower population does not diminish the draw on critical minerals needed for electrification and data infrastructure.5
Technology demand is pulling in the opposite direction. Hyperscale data center operators are signing master supply agreements for firm power, and analysts point to gas-fired generation as the round-the-clock backstop for computing and cooling loads. That demand layer is young, price-insensitive, and growing.2
The tension is between two demand curves: one shrinking with fertility, one expanding with compute. Wood Mackenzie’s model says the demographic effect wins by mid-century. But the firm’s own caveat about critical minerals suggests the energy mix inside that smaller total looks very different.5
War inflation complicates the picture. The Middle East conflict has prompted the Asian Development Bank to cut its 2026 growth forecast for developing Asia to 4.9%, with prolonged energy market disruptions expected to keep inflation elevated across the region. A lower-growth world with higher energy costs compresses consumption earlier than demographics alone would predict.4
Crude markets are pricing a similar outcome. A Bloomberg Intelligence survey found most participants expect Brent to average $81 to $100 a barrel over the next 12 months, with demand forced to slow in response to supply losses from the war. ICE Brent front-month sat at $88.82/bbl as of Saturday’s close (2026-08-15).1
TS Lombard’s chief China economist Rory Green has warned that a super El Niño could amplify food and energy inflation on top of war-related disruptions, calling the scenario “Super El Niño: Famine Follows War?” in a June note. Fertilizer costs and crop failures feed directly into consumer prices, which in turn shapes central bank policy and industrial energy demand.3
The demographic story is a multi-decade structural trend, not a trading signal. But the ADB’s growth cut and the wartime oil premium are current factors that reinforce the same direction: weaker near-term economic expansion, elevated prices, and demand destruction arriving faster than the super-cycle models assume.4
For gas and power traders, the relevant question is which demand segments hold up as the total shrinks. Residential and light commercial load tracks population; industrial base load tracks demographics with a lag; but data center power purchase agreements are contracted and bankable. The fertility curve says less gas boilers in 2050. The hyperscaler curve says more gas turbines.2
Wood Mackenzie’s peak-vs-plateau debate matters for LNG project sanctioning over the next few years. If global demand peaks in 2035, projects now entering FID with 20-year offtake agreements will still have buyers, but the second wave of post-2030 supply faces a market that is structurally shrinking outside Asia.5
The unresolved risk is whether the ADB-style growth downgrades and wartime premiums push the demand peak left, towards 2030. That would leave long-dated oil and gas options priced for the old curve holding positions that demographics are quietly unwinding.4
Watch Chinese population data through 2026. A repeat of last year’s 3.4 million decline on top of war-driven inflation would force forecasters to pull their peak demand estimates forward, and that repricing would hit the longest-dated contracts first.5