The world could soon see a massive oil glut. Here's why.

The world could have a glut of oil by the end of the decade because of rising production combined with declining demand as consumers and businesses switch to electric vehicles and renewable energy, according to a new report from the International Energy Agency.

The International Energy Agency said Wednesday that the world's total oil supply capacity is expected to rise to about 114 million barrels a day by 2030, which the group said would amount to "staggering" 8 million barrels a day beyond projected demand. 

That type of spare capacity hasn't been seen outside the COVID-19 lockdowns of 2020, when economies across the world shut down as governments sought to stop the spread of the deadly virus, the IEA said. The extra capacity could have "significant consequences for oil markets," ranging from the U.S. to OPEC member nations such as Saudi Arabia and Kuwait, it added.