Demand is expected to reach 101.9 million barrels per day on average in 2023, an increase of two million barrels per day from last year, the IEA said in its monthly oil market report.
It would be up 1.4 million barrels a day from the pre-pandemic level in 2019 as consumption of fossil fuels behind global warming has yet to peak.
Independent energy research firm Rystad puts the turning point at no earlier than 2025.
The IEA expects world oil output to rise by 1.2 million barrels per day in 2023, with the gains driven by the United States, Brazil and Norway.
It said production increases should outpace demand growth in the first quarter and match it in the second.
"A substantial deficit could emerge in (the second half of 2023) as China's reopening drives demand higher," while Russian output will likely be constrained by Western sanctions, it said.
Russia's announcement this month that it will cut output by five percent, or 500,000 barrels per day, in March is "a sign that Moscow may be struggling to place some of its barrels", the IEA said.
Energy prices soared during 2022, attributed in part to Russia's attack upon Ukraine, with petrol prices peaking in midyear in many regions before easing by the start of 2023.