Demand for oil in cars, planes and aircraft will start to decline after 2026, according to the International Energy Agency (IEA).

The IEA said transport use of oil looks likely to peak within three years amid a switch to electric vehicles and alternative fuels.

However, in an annual report the organisation warned that investment in oil infrastructure is currently too high to be compatible with targets to end greenhouse gas emissions.

"Oil producers need to pay careful attention to the gathering pace of change and calibrate their investment decisions to ensure an orderly transition," said IEA Executive Director Fatih Birol in a statement accompanying the report.

Overall oil demand growth in China will slow markedly from 2024 after picking up following the end of COVID restrictions, according to the IEA, but growth in emerging and developing economies will continue.

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