The global transition away from fossil fuels is losing momentum, confirmed by BP’s latest annual outlook, which includes a slight but significant increase in the long-term forecast for natural gas demand. The revised projections for both gas and oil strongly suggest that the world will not achieve the crucial 2050 net-zero emissions target.
BP’s new figures show that natural gas demand is now forecast to reach 4,806 billion cubic meters a year in 2050, a 1.6% rise from the previous estimate. Oil consumption projections also saw a major upward revision, expected to hit 83 million barrels per day (b/d) in 2050, up 8% from the prior forecast of 77 million b/d. The company also pushed back the expected peak oil demand date by five years, now projecting 103 million b/d in 2030.
The sustained and increasing demand for hydrocarbons is primarily driven by geopolitical turbulence. BP’s chief economist notes that conflicts in Ukraine and the Middle East, along with trade tariffs, are intensifying nations’ focus on ensuring energy security through domestic supplies. While this might motivate some countries to become ‘electrostates’ focused on low-carbon domestic power, the report warns of the strong incentive to prioritize domestically produced fossil fuels over imported energy alternatives.
This slow pace of transition has severe climate implications. BP’s modeling shows that the current trajectory risks exhausting the cumulative 2∘C carbon budget limit by the early 2040s. The company stresses that this extended delay significantly increases the future economic and social cost of necessary mitigation efforts. To align with the 2050 net-zero goal, BP states oil demand must decline sharply to about 35 million b/d by that date.
Despite the rapid expansion of renewable energy capacity, oil is forecast to remain the single largest source of primary global energy supply, holding a 30% share in 2035. Renewables, while growing significantly from 10% to 15% of the primary energy supply by 2035, are not expected to surpass oil’s market share until the late 2040s. The report arrives as BP itself faces criticism for recently abandoning some green targets in favor of a “fundamental reset” to ramp up oil and gas production.