Oil is projected to maintain its position as the world’s leading energy source for the next two decades, postponing the clean energy transition’s true victory until the late 2040s. The latest annual energy outlook from BP reinforces this timeline, revising its long-term oil and gas demand forecasts upward and concluding that the world is not on a path to meet its ambitious 2050 net-zero targets.
The BP report’s revised figures reflect a more stubborn reliance on fossil fuels than previously estimated. Oil consumption is now forecast to be 83 million barrels per day (b/d) in 2050, an 8% increase from the prior estimate of 77 million b/d. Natural gas demand also holds steady, predicted at 4,806 billion cubic meters annually in 2050. The energy giant also delayed its forecast for peak oil demand by five years, now expecting it to hit 103 million b/d in 2030, demonstrating a prolonged period of high consumption.
A key factor underpinning this sustained demand is the heightened global focus on energy security, triggered by current geopolitical volatility. BP’s analysis points to conflicts like the war in Ukraine and Middle Eastern tensions, alongside rising trade tariffs, which are compelling nations to secure domestic supplies. This pressure for self-sufficiency may drive some states towards accelerating domestic, low-carbon electrification to become ‘electrostates,’ but critically, it also risks increasing the preference for locally produced fossil fuels over uncertain imports.
Despite the impressive growth of renewable energy—projected to meet over 80% of new electricity demand by 2035, with China contributing half of this growth—oil will remain the largest single source of primary global energy supply, holding a significant 30% share in 2035. Renewables are expected to rise from 10% of the primary energy supply to 15% by 2035, but BP’s modeling shows they will only surpass oil’s market share toward the end of the 2040s, illustrating the decade-long inertia of the current energy system.
The climate consequences of this delay are stark. BP stresses that to meet the 2050 net-zero goal, oil demand must fall much faster and with greater intensity, dropping to approximately 35 million b/d by 2050. On the current trajectory, BP warns that cumulative carbon emissions are set to breach the critical 2∘C carbon budget limit by the early 2040s. The company cautions that this prolonged period of delay significantly escalates the economic and social costs required for future climate mitigation.