The world’s appetite for oil and gas could keep growing for another 25 years, according to a new report from the International Energy Agency (IEA). The findings mark a sharp turn from earlier forecasts that predicted a near-term peak in fossil fuel consumption and a rapid global shift toward renewable energy.
A Major Reversal From Prior Outlooks
In its World Energy Outlook 2025 released on Wednesday, the Paris-based agency said that under current government policies, global oil demand is now expected to rise until 2050, reaching about 113 million barrels per day. That would represent an increase of roughly 13 percent from 2024 levels. The IEA also projects total global energy demand will climb by about 90 exajoules by 2035, a 15 percent increase from today.
This scenario assumes governments keep their current energy and climate rules in place without adopting new net-zero commitments. It represents a notable shift from previous IEA reports published during the Biden administration, which had predicted that oil demand would peak before 2030.
The change follows months of criticism from Washington, where President Donald Trump has urged American energy producers to expand oil and gas output and accused global organizations of underestimating the role fossil fuels will continue to play in meeting global demand.
The Politics Behind the Pivot
During the previous administration, the IEA was seen as closely aligned with U.S. climate policy. Its 2021 outlook declared that there should be “no new investment in oil, gas, or coal” if the world hoped to achieve net zero emissions by 2050. But that view drew pushback from energy-producing nations, including the United States, Saudi Arabia, and Russia, as well as from private industry leaders who said it ignored practical realities.
Trump’s Energy Secretary Chris Wright called the IEA’s earlier demand-peak projections “nonsensical.” The United States remains the largest financial contributor to the IEA, which is funded by its member countries.
IEA Executive Director Fatih Birol said in a press briefing that the updated scenario reflects “the differing choices governments are making about energy” rather than ideological preferences. The shift signals an acknowledgment that economic growth, industrialization, and population expansion in developing nations are likely to sustain demand for fossil fuels far longer than many environmental advocates had hoped.
OPEC Responds: “The Notion of Peak Oil Is Misguided”
The Organization of the Petroleum Exporting Countries (OPEC) was quick to welcome the IEA’s change in tone. “We hope… we have passed the peak in the misguided notion of ‘peak oil,’” OPEC said on its website.
OPEC has long argued that predictions of declining oil consumption were based on unrealistic assumptions about electric vehicle adoption and renewable energy scalability. The group maintains that hydrocarbons will remain essential to the global economy for decades, even as clean energy expands.
LNG Capacity Set for Major Expansion
One of the most striking findings in the IEA’s report is the projected boom in liquefied natural gas (LNG) capacity. The agency said that final investment decisions for new LNG projects have surged in 2025. By 2030, operations for roughly 300 billion cubic meters of new annual LNG export capacity are expected to begin, representing a 50 percent increase in supply compared to current levels.
Global LNG demand is forecast to rise from about 560 billion cubic meters in 2024 to 880 billion in 2035 and to 1,020 billion by 2050. Much of this demand will come from the power sector, driven in part by the explosive growth of artificial intelligence and data centers, which require immense amounts of electricity.
The IEA also noted that global investment in data centers is expected to reach $580 billion in 2025. If that happens, spending on data infrastructure would surpass the roughly $540 billion currently invested in oil supply each year.
Falling Short of Climate Goals
The agency’s report acknowledged that the world is still far from achieving its climate objectives. More than 190 countries signed the Paris Agreement in 2015, pledging to limit global temperature increases to 1.5 degrees Celsius above pre-industrial levels. The IEA now expects that threshold will be exceeded in every one of its projected scenarios.
“The world is on track to miss the 1.5-degree target,” the report said bluntly. Greenpeace policy adviser Kaisa Kosonen added, “We need to speed up and scale up, and governments at COP30 must now agree on a global response plan to urgently bridge the 1.5 C ambition gap.”
What It Means for Investors
For energy investors, the new outlook underscores a critical reality: fossil fuels are not disappearing anytime soon. While renewable energy remains on the rise, oil and gas are expected to stay dominant players in the global mix for decades.
That has several implications:
- Energy equities may retain long-term value. Integrated oil companies, LNG exporters, and pipeline operators could see steady or rising demand for their products and services well into mid-century.
- Volatility remains high. Political pressure around emissions, climate regulation, and carbon pricing will continue to weigh on investor sentiment.
- Natural gas is gaining importance. With data center and AI energy use accelerating, gas-fired generation is positioned as a flexible complement to renewables.
- ESG strategies will evolve. Investors may need to reassess how “transition” portfolios balance exposure between clean energy and traditional hydrocarbons.
The Bottom Line
The IEA’s 2025 report represents a pragmatic shift. It accepts that global demand for oil and gas may continue rising through 2050, even as nations struggle to rein in emissions. For investors, it signals that the global energy transition will likely be slower and more uneven than previously thought.
Rather than betting entirely on one side of the energy equation, the report suggests that both fossil fuel producers and renewable energy developers will play crucial roles in shaping the world’s economic and environmental future.
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