The world is currently on an energy pathway that will miss the 2050 net-zero target, according to a revised assessment from BP. The energy major has raised its long-term forecasts for oil and gas demand and delayed the expected peak for oil, signaling a critical slowdown in the global clean energy transition.
BP’s annual outlook presents compelling evidence of sustained fossil fuel reliance. Peak oil demand is now forecast to hit 103 million barrels per day (b/d) in 2030, a delay of five years. The long-term forecast for oil consumption in 2050 has also been raised by 8%, climbing to 83 million b/d. Natural gas demand projections for 2050 saw a slight increase, now set at 4,806 billion cubic meters a year.
The primary reason for this slower-than-expected transition is the focus on national energy security, intensified by geopolitical factors. BP’s chief economist attributes the trend to the war in Ukraine, Middle East conflicts, and rising trade tariffs. This drive for self-sufficiency risks encouraging reliance on domestically produced fossil fuels, even as it creates an incentive for some countries to accelerate towards low-carbon ‘electrostates.’
The consequences for climate goals are profound. BP calculates that to hit the 2050 net-zero target, oil demand needs to plummet to about 35 million b/d by that date. The current trajectory, however, risks breaching the cumulative 2∘C carbon budget limit by the early 2040s, significantly increasing the future economic and social costs required for climate mitigation.
Despite the rapid growth of renewables—expected to meet over 80% of new electricity demand by 2035—oil is forecast to remain the largest single source of primary global energy supply, holding a 30% share in 2035. Renewables are set to rise from 10% to 15% of the primary energy supply by 2035 but are not expected to surpass oil’s market share until the late 2040s, underscoring the formidable inertia in the energy system.