China overtakes U.S. as biggest energy consumer: IEA

A driver talks on a mobile phone as he sits in traffic along a main road in central Beijing October 12, 2010. China, which overtook the United States as the world's largest auto market last year, has been a major bright spot for sales as the global industry struggles to recover from a steep downturn. But the market has been slowing since May as Beijing took measures to keep the economy from overheating. Industry observers expect the recent upturn in demand to extend into October and even into the winter months as many people would rush to buy cars, worrying that Beijing may scale back or even scrap its policy incentives in 2011.

LONDON (Reuters) - China has become the world's largest energy user, having overtaken the United States, the head of the International Energy Agency said on Tuesday.

"China is now the largest energy consumer by our definition," the executive director of the Paris-based IEA, Nobuo Tanaka, told an industry conference.

"Probably half of the oil demand increase comes from China. Nobody knows when it (will) slow down."

The IEA advises 28 developed countries. China is not a part of the IEA but the agency monitors the country as its oil demand can have a significant impact on prices.

Tanaka said Iraq, which has just revised up its estimates of proven oil reserves by 25 percent, could have a major influence on the oil market.

"Iraq can be a game changer. We need Iraq oil," Tanaka said.

(Reporting by Ikuko Kurahone; editing by Christopher Johnson)