As we step into 2025, reflecting on the turbulent, transformative energy landscape of 2024 is essential. This year was marked by breakthroughs in renewable energy, the resilience of fossil fuels, geopolitical turbulence, and heated debates over decarbonization. While clean technologies achieved record growth, the enduring dominance of oil, gas, and LNG underscored the complexities of balancing energy security, economic stability, and climate ambitions.

ENERGY SECURITY: THE CORNERSTONE OF GLOBAL STABILITY

Fact: Global primary energy demand surged to 301 million barrels of oil equivalent per day (mboe/d) in 2023, and projections indicate it will rise to 374 mboe/d by 2050, marking a 24% increase over three decades. 

Energy security was the recurring theme in 2024, dominating discussions in boardrooms, elections, and global summits. In a polarized world facing energy supply pressures and climate imperatives, the tension between fossil fuels and clean energy has become more pronounced.

• Record U.S. Shale Output: U.S. shale oil production surged to 10 million barrels daily, reinforcing America’s role as a cornerstone of global energy stability.
• LNG Export Dominance: U.S. LNG exports played a pivotal role in diversifying Europe’s energy sources, slashing dependence on Russian gas by 40% since 2022. Record shipments also met the rising demand in Asia, cementing the U.S.’s status as the world’s largest LNG exporter.
• UK Windfall Tax Fallout: The UK’s extension of its windfall tax on oil and gas profits to 78% sparked industry backlash, threatening £26 billion in economic contributions and 42,000 jobs. Analysts warned this policy could stifle North Sea investments, further complicating the UK’s energy transition ambitions.
• OPEC+ Production Cuts: OPEC+'s decision to extend production cuts into 2025 aimed to stabilize markets but drew skepticism. Goldman Sachs projected bearish outcomes as key producers planned to phase out 2.2 mb/d of voluntary cuts over the next year.

Geopolitical tensions amplified the focus on energy security. The potential closure of the Strait of Hormuz, which handles 20% of the world’s oil supplies, loomed as a significant threat. Similarly, ongoing conflicts in Ukraine and Gaza added further volatility to energy markets.

RENEWABLES AND CLEAN TECHNOLOGIES: PROGRESS UNDER PRESSURE

Fact: Global renewable electricity generation is set to reach over 17,000 TWh by 2030, an almost 90% jump from 2023, capable of powering China and the U.S. combined.

Renewables made impressive strides in 2024, but the journey had obstacles. Investment milestones were achieved even as material shortages, regulatory hurdles, and inflation threatened progress.

• Clean Energy Investment Milestone: Since 2020, global investments in clean energy exceeded $2 trillion, with the U.S., EU, and China accounting for 80% of this total.
• Renewable Power Milestones: Solar PV and wind generation have surpassed hydropower as the second-largest renewable energy source globally, and additional gains are anticipated in the coming decade.
• Material and Regulatory Challenges: Rare earth shortages increased solar panel costs by 20% while permitting issues delayed 30% of U.S. renewable projects.
• Offshore Wind Tipping Point: Projects like Vineyard Wind exemplified progress in offshore wind, but inflation-driven cost overruns and delays beyond 2030 highlighted the sector’s financial vulnerabilities.

Subsea interconnectors emerged as a promising solution for energy independence. The proposed 6 GW HVDC cable linking North America and Europe aimed to create a secure, carbon-free energy supply across the Atlantic.

FOSSIL FUELS: DEFYING PREDICTIONS OF DECLINE

Fact: Despite its net-zero aspirations, OPEC forecasts oil will still account for the largest share of the energy mix in 2050. Between 2024 and 2050, cumulative oil-related investments are pegged at $17.4 trillion.

Despite growing pressure to phase out fossil fuels, hydrocarbons remained central to global energy systems, supported by discoveries, technological advancements, and financial backing.

• $6.9 Trillion Fossil Fuel Financing: Over the past eight years, 60 global banks financed fossil fuel projects, with JPMorgan Chase, Citigroup, and Bank of America leading the charge.
• Global Oil Discoveries: Notable finds in Guyana, Namibia, and China highlighted continued interest in exploration. ExxonMobil’s latest discovery at Guyana’s Stabroek block expanded its tally to over 30 discoveries since 2015.
• LNG Demand Surge: LNG demand is forecasted to rise by 50% by 2040, driven by coal-to-gas switching in Asia and industrial applications worldwide.

DECARBONIZATION: BREAKTHROUGHS AND BOTTLENECKS

Fact: Offshore oil and gas electrification alone could reduce emissions by over 80%, yet achieving net zero globally by 2050 requires a whopping $78 trillion investment in power infrastructure and emerging technologies.

Efforts to decarbonize energy systems made significant strides but faced notable challenges, revealing a mixed narrative.

• Carbon Capture Leadership: The U.S. launched a large-scale carbon capture facility that can store 5 million tons of CO₂ annually, reinforcing its position in emissions reduction technologies.
• Methane Emission Reductions: MethaneSAT was deployed to monitor and reduce global methane emissions by 75% by 2030, a goal that requires $170 billion in investments.
• Electrification of Platforms: Equinor led efforts to electrify North Sea platforms, which slashed 160,000 tons of CO₂ emissions annually and showcased the integration of renewables with fossil fuel operations.

Despite progress, challenges persisted, including slow permitting, high costs, and policy inconsistencies.

GEOPOLITICS AND ENERGY: NAVIGATING GLOBAL TURBULENCE

Fact: The Strait of Hormuz remains a critical chokepoint, with 20% of global oil supply passing through annually—its potential closure in 2024 spiked crude oil prices by 15% within days.

Geopolitical instability, policy shifts, and climate negotiations shaped energy markets in 2024, making it a year of profound uncertainty.

• Middle Eastern Unrest: Iran-Israel tensions heightened fears of supply chain disruptions, potentially escalating oil and LNG prices.
• COP29 Outcomes: Held in Azerbaijan, COP29 resulted in a $1.3 trillion annual climate finance pledge by 2030, though critics noted the gap between ambition and action. The adoption of Article 6 established a global carbon trading mechanism, incentivizing emissions reductions.
• Sanctions on Russian Energy: The EU’s 14th sanctions package targeted Russian LNG projects, limiting capacity expansion and restricting LNG transshipment through European ports.

INNOVATIONS AND DIGITAL TRANSFORMATION: THE ENERGY SECTOR’S EVOLUTION

Fact: Investments in "ghost rigs" and automation led to $2 billion in cost savings in 2024. 

Technology continued to reshape the energy industry, offering solutions to enhance efficiency and resilience, albeit with challenges.

• Automation and AI: Digitalization drove advancements, and the oil and gas automation market is projected to reach $24.63 billion by 2025. Unmanned "ghost rigs" emerged as a cost-effective solution, reducing workforce needs while boosting safety.
• Cybersecurity Concerns: Increased digitalization heightened vulnerability to cyberattacks, prompting significant investments in security measures.

THE ROAD AHEAD: A COMPLEX ENERGY ECOSYSTEM

As 2025 begins, the energy sector stands at a crossroads. The push for clean technologies is stronger than ever, but fossil fuels remain integral to global stability. Bridging this divide requires unprecedented collaboration, innovation, and clear policy direction.

The events of 2024 underscored the complexity of the energy transition. While progress was made, affordability, security, and sustainability challenges highlighted the need for balanced, inclusive solutions. The road to a cleaner, more resilient energy future is not straightforward, but the momentum built in 2024 offers a foundation for meaningful change in the years ahead.