Oil & Gas

BUSINESS: INVESTMENTS IN FOSSIL FUELS REGAIN MOMENTUM

The IEA’s 2025 World Energy Outlook projects oil demand to reach 113 million barrels per day by 2050, roughly 13% higher than in 2024. The agency says the revision reflects real-world market behavior, where companies continue to invest heavily in fossil fuel projects. The report also highlights a booming LNG (liquefied natural gas) expansion, with new export capacity expected to grow 50% by 2030, reaching over 1,000 billion cubic meters by 2050. A surge in data centers and AI-powered industries is driving this demand, as global electricity needs outpace renewable supply.

ECONOMY: DATA CENTERS SURPASS OIL SUPPLY SPENDING

The energy sector is seeing a shift in investment priorities. Global spending on data centers could reach $580 billion in 2025, overtaking the $540 billion annual global spending on oil supply, according to the IEA. This reflects the growing economic weight of digital infrastructure in energy demand patterns. Despite strong growth in clean technologies, such as EVs and solar power, fossil fuels still dominate total energy use. The report warns that under current policies, global energy demand will rise 15% by 2035, making it increasingly difficult to limit global warming to 1.5°C.

GEOPOLITICAL: POLICY GAPS AND CLIMATE TENSIONS

The shift in the IEA’s tone also reflects growing political divides over climate and energy policy. The United States, the IEA’s largest funder, has pushed the agency to balance climate commitments with energy security realities. Former U.S. officials under Donald Trump criticized previous IEA projections as “nonsensical,” while the Biden administration emphasized clean energy transitions and reduced oil investment. However, with limited progress from major economies on new climate targets, the IEA says there is insufficient global coordination to reach net zero. Under its current policies scenario, the world is heading toward temperature rises well above 1.5°C, underscoring what the agency calls “a widening gap between ambition and action.