Global Outlook 2025: Energy Security Takes Priority

By the Energy Industries Council (EIC), a Breakbulk Event Partner.

As 2024 comes to an end, global energy priorities have shifted, with a focus on energy security and affordability taking precedence over sustainability. Oil and gas remain central to the global energy mix until at least 2030, as indicated by the International Energy Agency (IEA). Rather than calling for a complete phase-out of oil and gas, the IEA is now concentrating on eliminating “unabated” oil and gas assets, those lacking carbon capture technology, signaling a growing endorsement of carbon capture solutions.

Despite ongoing geopolitical instability in regions like Ukraine and the Middle East, oil and gas prices have remained relatively stable. The sector’s high profit margins have encouraged operators like BP, Shell and Total to continue investing in oil and gas projects. Contractors are similarly retrenching in the sector, seeing greater certainty and profitability compared to renewable energy and clean technology projects.

However, this renewed focus on fossil fuels has raised concerns about the impact on the global energy transition. Shell has already reduced its 2030 carbon emissions target and scrapped its 2035 goal to further reduce its carbon footprint. BP has also scaled back its decarbonization plans, prioritizing investments in fields in the Gulf of Mexico, such as Kaskida and Tiber, and redeveloping oil assets in Kuwait. Although achieving net zero by 2050 remains a target, meeting shorter-term milestones is proving difficult.

According to data from EICDatastream, oil and gas projects are more likely to reach Final Investment Decision (FID) than those in other energy sectors, with around 25% of these projects gaining approval. Nevertheless, challenges persist. Rising inflation is expected to impact heavily indebted sectors like solar, wind and nuclear energy more severely. Ongoing unrest in the Middle East could also disrupt oil and gas production in the short to medium term.

While hydrogen and carbon capture projects receive political backing through incentives, government funding and tax relief, their progress has been sluggish. Only 12% of carbon capture projects set to start by 2028 have reached FID, with hydrogen projects facing similar delays. High costs, the risks of first-of-a-kind technologies and supply chain issues have all contributed to these delays. Uncertainty over government approval processes further complicates matters. Additionally, the energy sector is facing a future skills shortage, which could hinder the rollout of crucial projects, creating bottlenecks that may jeopardize efforts to meet climate targets.

Sustainable Aviation Fuel (SAF) is also gaining attention as the aviation industry seeks to lower its carbon emissions. However, current production meets just 0.5% of global demand, putting it in a unique position as the only sector where demand currently outstrips supply. While the U.S. and Europe lead SAF production, challenges remain. In 2024, the construction of a major SAF facility in Rotterdam was delayed, and BP scaled back its SAF production plans due to lower margins. This could lead to Europe relying on SAF imports from the U.S. and Asia in the short term.

In summary, energy security has taken priority, with a renewed emphasis on oil and gas. However, the progress of clean technologies remains slow, hindered by high costs, supply chain issues, approval delays and a skills shortage. These factors could slow the pace of decarbonization efforts if they are not addressed urgently.


Breakbulk’s Global Outlook 2005 series continues with regional analysis from the EIC followed by a Q&A with executives leading companies from each of the four regions: Middle East & Africa, Europe, Asia and the Americas.

PHOTO: BBC Arkhangelsk transports a full deck of wind blades in Vaasa, Finland. CREDIT: BBC Chartering