The global energy system is suffering from a massive inertia problem, requiring decades to fundamentally restructure, a finding confirmed by BP’s latest annual outlook. The energy major has raised its long-term oil and gas demand forecasts, a clear signal that the transition pace is inadequate to meet the 2050 net-zero target.
BP’s revised figures confirm the resilience of fossil fuels. Oil consumption in 2050 is now projected to hit 83 million barrels per day (b/d), an 8% increase from the previous 77 million b/d estimate. Natural gas demand is similarly forecast to remain elevated at 4,806 billion cubic meters annually in 2050. Furthermore, the company now expects oil demand to peak five years later, in 2030, at 103 million b/d.
A primary cause of this inertia is the renewed global focus on national energy security, driven by geopolitical turmoil. BP’s chief economist notes that conflicts and trade tariffs compel nations to favor domestic energy supplies. This security-first mandate risks increasing reliance on domestically produced fossil fuels over imported alternatives, slowing the overall energy transition, despite creating incentives for some low-carbon ‘electrostates.’
The report warns of severe climate consequences if the current slow pace continues. BP’s modeling shows that cumulative carbon emissions are set to breach the critical 2∘C carbon budget limit by the early 2040s, significantly increasing the future economic and social costs of mitigation. To align with net-zero 2050, oil demand must see a radical and immediate decline, dropping to approximately 35 million b/d by that date.
The inertia is most visible in the market share projections. Oil is forecast to remain the single largest source of primary global energy supply, holding a 30% share in 2035. While renewables are growing from 10% to 15% of the primary energy supply by 2035, they are not expected to surpass oil’s market share until the late 2040s, proving the immense difficulty of fundamental, rapid energy system change.