In a swift about-turn the International Energy Agency (IEA) said oil markets have widely recovered from extreme pandemic-induced lows and are on track to surpass expected levels by 2026. 

The IEA's new report suggests if global energy policy remains as it is, demand will reach "104 million barrels a day by 2026, up 4 percent from 2019 levels." It also suggested without increased focus on environmental policies, oil demand would reach 2019 levels by 2023. 

It's a change from the Agency's view in January, when its monthly report said: "It will take more time for oil demand to recover fully as renewed lockdowns in a number of countries weigh on fuel sales."

"The COVID-19 crisis caused a historic decline in global oil demand – but not necessarily a lasting one," Fatih Birol, the IEA's executive director said via a statement. 

It's expected that 2026 will be the year of "peak oil" – the moment the global oil and gas supply reaches its highest point, before falling as renewable energy sources are increasingly relied upon. "If governments follow through with strong policies to hasten the shift to clean energy," according to the report.

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Birol noted that could be reached sooner than 2026, but governments must act faster if they are to achieve that. 

"Achieving an orderly transition away from oil is essential to meet climate goals, but it will require major policy changes from governments as well as accelerated behavioral changes. Without that, global oil demand is set to increase every year between now and 2026," he added. 

Asia is expected to lead the growth in global demand and will make up 90 percent of the increase from 2019 to 2026, according to the agency's analysis. 

"By contrast, demand in many advanced economies, where vehicle ownership and oil use per capita are much higher, is not expected to return to pre-crisis levels," the IEA said.