BP raises energy forecasts: Delay in energy transition associated with costs

The latest forecast from BP signals a slowdown in the global energy transition. In the highly regarded annual report, the oil company raises its predictions for the demand for oil and gas, as renewable energies like wind and solar are not growing quickly enough to keep pace with the rising global energy demand. BP warns that a delay in the energy transition could be 'costly' and emphasizes that oil will continue to play 'a significant role in the global energy system for the next 10-15 years.' The report anticipates that oil demand will be around 97.8 million barrels per day in 2035, an increase of more than 5 percent compared to last year's forecast. This figure is based on the current trajectory of the global energy system. Considering the net-zero targets—involving a reduction of CO₂ emissions by about 95 percent from current levels—the forecast for oil demand in 2035 is 80.2 million barrels per day, an increase of 10 percent compared to the previous year. For 2050, an oil demand of 76.8 million barrels per day is projected under the current trajectory, compared to 73 million barrels per day forecasted last year. The current global consumption stands at around 100 million barrels per day. According to BP, the natural gas demand for 2035 has also been increased by 3 percent compared to last year. Despite the higher demand forecasts for fossil fuels, the CO₂ emissions projections for 2050 are lower, both under the current trajectory and in the context of net-zero targets. The calculations consider various assumptions and judgments about the nature of the energy transition, the company emphasizes. While the exact reasons for the increased oil and gas demand are not directly mentioned in the report, BP notes that the decline in oil use in road transport is offset by rising consumption in the petrochemical industry. Additionally, emerging economies with increasing wealth and living standards are also boosting oil demand. BP’s chief economist Spencer Dale describes the current situation as an 'energy supplementation phase,' where the consumption of both low-carbon energies like renewables and fossil fuels is increasing. According to Dale, the challenge lies in moving to a phase where low-carbon energies grow fast enough to meet global energy needs while simultaneously reducing fossil fuel consumption and carbon emissions.