Global Energy Trends and the Challenges of Transition and Market Balance
The energy sector is expected to witness positive developments during 2025, after facing disruptions and challenges in 2024 marked by fluctuations in supply and demand, escalating geopolitical tensions, macroeconomic weakness, and a continued focus on the energy transition. Statements by US President Donald Trump during his second presidency regarding wars, tariffs, and a "national energy emergency" have further exacerbated the situation, making it more uncertain and complex.
In this context, a report by the International Energy Agency (IEA) published in early March 2025 indicates that global demand for energy, including oil, natural gas, coal, renewables, and nuclear power, will rise this year at a faster pace than in previous years. Global energy demand grew by 2.2% in 2024, significantly higher than the average annual rate of just 1.3% recorded between 2013 and 2023.
Emerging and developing economies accounted for more than 80% of global energy demand growth in 2024, with China recording the largest share of energy demand growth despite slowing to less than 3% during 2024. Meanwhile, India saw the second-largest increase in energy demand in absolute terms, surpassing the increase across all advanced economies combined.
Advanced economies, in turn, witnessed a notable return to energy demand growth after years of decline, with demand rising by nearly 1%. The United States recorded the third-largest growth in demand in 2024 after China and India. Energy demand in the European Union also returned to growth for the first time since 2017 (excluding the post-COVID pandemic rebound in 2021).
Renewable energy sources accounted for the largest share of growth in total energy supply at 38%, followed by natural gas at 28%, coal at 15%, oil at 11%, and nuclear power at 8%. One reason for this rise was the high temperatures recorded over the past year, which added 0.3 percentage points to the 2.2% growth. Meanwhile, the improvement in the energy intensity of the global economy was limited to just 1%, reflecting its continued slowdown in recent years.
Electricity, particularly from low-emission sources, recorded the highest growth rate among energy sources, with demand rising by 4.3% in 2024, nearly double the growth rate of total energy demand. This increase was driven by growing reliance on electricity-intensive appliances such as air conditioners and cooling systems, as well as advanced industries, data centers, and artificial intelligence, alongside increasing electrification across various end uses.
By contrast, oil's share of total energy demand fell below 30% for the first time, having stood at 46% five decades ago. Oil demand declined in the global road transport sector, particularly in China (-1.8%) and advanced economies (-0.3%), while demand rose in the aviation and petrochemical sectors.
Natural gas recorded the highest growth rate among fossil fuels, increasing by 2.7% in 2024 to reach 115 billion cubic meters, compared with an annual average of 75 billion cubic meters over the past decade. China posted the highest rate of growth in gas demand at more than 7% (30 billion cubic meters), while demand in the United States rose by around 2% (20 billion cubic meters), and consumption in the European Union saw modest growth.
On the price front, the OPEC+ strategy succeeded in supporting oil prices for the fourth consecutive year, yet keeping Brent crude above $80 a barrel in 2025 appears to be a major challenge. Forecasts point to a potential drop to an average of between $70 and $75 a barrel amid ongoing global economic and geopolitical volatility.
Despite the limited capacity of OPEC+ to increase production during 2025, capital investment in the energy and natural resources sector is expected to continue rising, reaching record levels with a 6% increase in real terms compared with 2024. This reality reflects the continued central role of conventional energy sources, despite the growing role of renewable energy in the global energy mix.
As for nuclear power, more than 7 gigawatts were brought online in 2024, an increase of 33% over 2023. This new capacity represents the fifth-highest level in the past three decades. Electricity generation from nuclear power rose by 100 terawatt-hours in 2024, matching the largest increase this century outside the rebound that followed the COVID pandemic.
Ultimately, 2025 appears set to be a pivotal year for a global energy sector that looks more complex than ever, as economic, geopolitical, and technological factors intertwine in shaping the trajectory of this vital industry. On the one hand, the world wavers between the need to secure sustainable energy sources and preserving the stability of traditional markets. On the other hand, environmental challenges and the pressures of transitioning toward clean energy dictate a different course that requires reassessing production and consumption strategies.
Translated from Arabic with AI. Read it in Arabic