The path to a global net-zero future by 2050 is facing a significant roadblock, according to the latest analysis from energy giant BP. The company has substantially increased its long-term projections for oil and gas demand, a stark indication that the world is moving too slowly to meet its crucial climate targets. This revised outlook highlights an undeniable slowdown in the clean energy transition, forcing a re-evaluation of current climate strategies.
BP’s closely followed annual outlook report now estimates that oil consumption is on track to reach 83 million barrels per day (b/d) in 2050, an increase of 8% from its previous forecast of 77 million b/d. Similarly, the current trajectory suggests natural gas demand will hit 4,806 billion cubic meters annually by 2050, a modest but meaningful rise from the prior estimate of 4,729 billion cubic meters. The company also pushed back its expected peak oil demand date by five years, now projecting 103 million b/d in 2030, showing fossil fuels maintaining market dominance for longer.
A major driver behind this shift is the global focus on energy security, intensified by ongoing geopolitical conflicts, such as the war in Ukraine and instability in the Middle East, along with rising trade tariffs. BP’s chief economist, Spencer Dale, noted that these tensions are prompting nations to prioritize reliable, domestic energy sources. While this could spur some states to accelerate towards ‘electrostates’ powered by low-carbon domestic energy, the report also warns it could lead to an increased reliance on domestically produced fossil fuels over imported alternatives.
The report underscores the drastic changes needed to reverse the trend. BP calculates that to successfully achieve global net-zero by 2050, the decline in oil demand would need to be far more immediate and aggressive, falling to approximately 85 million b/d by 2035 and a mere 35 million b/d by 2050. Failure to shift off the current path means cumulative carbon emissions are projected to exceed the 2∘C carbon budget by the early 2040s, dramatically raising the economic and social costs associated with climate mitigation.
Despite the rapid growth and investment in sustainable sources, BP projects that oil will remain the largest single source of primary global energy supply, accounting for 30% in 2035, only a slight dip from its current share. Renewables, while rising from 10% in 2023 to 15% in 2035, are not expected to overtake oil until the tail end of the 2040s. The company itself has recently faced controversy and investor scrutiny after undergoing a “fundamental reset,” scaling back some green targets to focus on oil and gas production amidst pressures for better share performance.