Efficiency is going to become an increasingly important factor when it comes to oil production and consumption, according to Fatih Birol, executive director at the International Energy Agency.
"When you look at the markets, there are two important determinants: one is how much oil we produce, the other one is how much oil we consume," Birol told CNBC Monday at the World Energy Congress in Istanbul, Turkey.
"When you look at the consumption side, it is very important to see what kind of impact the fuel economy measures, energy efficiency measures, affect the demand and supply," he added.
In September, the IEA said that oil demand growth was slowing at a faster pace than first thought. "Global oil demand growth is slowing at a faster pace than initially predicted. For 2016, a gain of 1.3 million barrels a day (mb/d) is expected," the IEA said in its September report, equating to a downgrade of 100,000 barrels a day from its previous forecast.
Using the example of China, Birol went on to explain how efficiency in road vehicles there was having an impact. "We see a slowing down of oil demand growth in China," he said. "One of the major reasons… is because cars are becoming much more efficient than in the past: for... 100 kilometers, they use less oil and they are much more efficient now, compared to a few years ago."
While this may be a good thing for climate change and efficiency, it represents a headache for producers, with hundreds of millions of barrels potentially not being consumed.
"It's good news for the consumers across the world because they pay less money for the same distance because they are using their cars much more efficiently," Birol said.
"And it will be even more so in the next years to come because there are many countries growing, such as India, such as (countries in) South East Asia, they have not yet set the fuel economy standards, efficiency standards," he added.
"Once they do it then the oil demand growth will slow down and (the) amount of oil (that) will need to be produced will be much less than we did in the past."
While he remained confident that efficiency would improve, Birol went on to state that we would "need oil for many years to come."
CNBC's Holly Ellyatt contributed to this report
