A release sent to Rigzone recently by the Rystad Energy team, which included analysis from several company representatives, highlighted multiple “significant trends that will shape the energy world in the coming year” .
One of those trends is that “geopolitical uncertainty will persist in 2025”, the release outlined. That trend was predicted by Jorge Leon, the company’s head of geopolitical analysis, who warned in the release that “2025 is set to be a year of heightened uncertainty”.
“The U.S.-China dynamic, under a new U.S. administration, will take the spotlight,” Leon said in the release.
“At the same time, ongoing conflicts in the Middle East and the war in Ukraine will command attention on the global stage. Rising instability across the Global South, the continued fracturing of international alliances, and the transformative impact of AI will further redefine the global order,” Leon added.
“Economically, the threat of a global trade war sparked by U.S. tariffs looms large, potentially stalling growth and fueling protectionist policies,” Leon went on to state, noting that “a key question is how quickly advanced nations can rein in inflation, especially as trade barriers complicate the efforts of central banks”.
“Meanwhile, governments are expected to pivot toward addressing mounting deficits,” Leon said in the release.
“Adding to these challenges, China’s economic slowdown, driven by a struggling real estate sector and subdued consumer confidence, risks creating significant ripple effects worldwide,” he added.
Aditya Saraswat, Rystad Energy’s senior vice president of upstream research, forecast in the Rystad release that the upstream sector is “poised for a more quiet year” in 2025.
“Global upstream investments are projected to decline by two percent next year, signaling a plateau after the robust growth seen earlier this decade,” Saraswat said in the release.
“Deepwater investments are expected to increase by three percent, driven by developments in Suriname, Mexico and Türkiye. Offshore shelf investments are predicted to grow by two percent, fueled by activity in Indonesia, Qatar, and Russia,” Saraswat added.
The Rystad senior vice president highlighted in the release that the company forecasts a decline of around eight percent in shale/tight oil investments in 2025, “due to a combination of lower activity and reduced unit prices”.
Saraswat also stated in the release that global liquids demand is estimated to grow by about one million barrels per day and said the faster pace of non-OPEC+ supply growth is leading to an oversupplied market, putting downward pressure on oil prices.
“Non-OPEC+ oil supply is expected to increase by approximately 1.4 million barrels per day, with both tight oil and deepwater contributing to this growth,” Saraswat noted.
“NGL and other liquids are also projected to grow next year, adding more than 300,000 barrels per day. Leading into 2025, the OPEC+ balancing act will make or break oil prices, seeking to manage its market share expectations alongside non-OPEC+ growth and slowing demand,” Saraswat warned.
Drill Baby Drill, CCUS, Low Carbon Markets
Also in Rystad’s release, Matthew Bernstein, a senior analyst for shale research at the company, said “U.S. shale oil producers won’t be moved by ‘drill, baby, drill’”.
“Donald Trump has come out unambiguously in favor of encouraging more oil and gas production in the United States; while executives may be encouraged by the supportive rhetoric, they are less likely than ever to boost budgets towards more drilling, especially as a potential oversupply of oil looms over the market and well productivity stagnates,” Bernstein said.
“Third-quarter 2024 reports, released around the election, show that management teams remain focused on shareholder returns and acquisition-driven inorganic growth rather than expanding through drilling activity,” he added.
“For now, ‘Shale 4.0’ investor priorities are expected to outweigh ‘Trump 2.0’ policy considerations in U.S. producer boardrooms,” he continued.
The Rystad Energy analyst stated in the release that investors are unlikely to accept reduced near-term returns alongside declining capital efficiency, “which a shift back to a high-production growth model would entail”.
Offering another trend to watch out for in 2025, Yvonne Lam, Rystad Energy Head of CCUS Research, said in the release that the CCUS market “is poised for rapid growth in 2025, with a wave of final investment decision (FID) approvals expected to meet project timelines”.
“This momentum stems from supportive policies and funding in Europe, increasing carbon dioxide removal (CDR) credit activity, and post-U.S. election market clarity,” Lam added.
Lam warned in the release that “key challenges remain, including a gap between CO₂ capture demand and infrastructure readiness, which could delay projects”.
“To address this, we anticipate progress in CO₂ storage regulations, particularly in the Asia-Pacific region, and faster permit approvals in North America and Europe,” Lam added.
In Rystad’s release, Artem Abramov, the company’s head of clean tech research, also projected that “low carbon energy markets [are] poised to flourish”.
“Numerous ambitious climate plans have emerged from the COP29 summit, including net-zero and coal phase-out commitments from Indonesia, Mexico and the EU, backed by 25 countries,” he said in the release.
“This keeps exponential growth scenarios for low-carbon energy very much on the agenda,” he added.
Abramov warned, however, that 2025 “could be another reality check for renewables and cleantech, with shifting policies favoring fossil fuels, green energy stocks under pressure, and uncertainty about funding and subsidies”.
BMI Key Themes
In a BMI report sent to Rigzone by the Fitch Group on December 3, which highlighted several oil and gas “key themes” for next year, BMI analysts outlined that the U.S., Brazil, Canada, and Guyana will collectively add over one million barrels per day of liquids production in 2025.
“The U.S. will contribute nearly 53 percent of this growth, with a large portion coming from the Permian,” the BMI analysts said in the report.
“The Permian is a prolific shale play that can ramp up and ramp down investment and consequently production quickly in response to oil prices, curbing risks,” they added.
“Other non-OPEC growth leaders have longer investment cycles and would be unable to lower or raise output in response to prices. For the most part, they will be committed to bringing on new capacity regardless of oil prices,” they continued.
The BMI analysts also outlined in the report that Trump’s “deregulation of the U.S. oil and gas industry” will “relieve… small caps of emissions related financial burdens while oil majors lose their scale and technology advantages”.
“Despite the soft touch approach to regulations expected, U.S. oil production growth is set to slow as market conditions dictate steady investment over rapid production growth,” they added.
BMI analysts noted that, “despite the reduction in regulations and unblocking of permitting hurdles”, they expect companies “to respond to price signals rather than government policy when it comes to raising investment and production”.
“As our current Brent crude price forecast indicates, a decline in prices is expected in the coming years due to oversupply,” the analysts said.
“This will ultimately dictate future investment and oil production for U.S. producers rather than a change in energy policy and regulations. For 2025, we forecast U.S. capex to decline for the second year in a row to $57.9 billion, down by 9.2 percent from 2024,” they added.
BMI analysts also projected in the report that “a keen focus on shareholder returns and disciplined investment will see global capital expenditure decline in 2025”. The exception will be state-backed firms, the analysts highlighted.
The analysts also outlined in the report that, next year, global oil and gas demand “remains uncertain as trade war impacts and inflation conflict with stable economic growth and rising fuel demand”.
“Energy consumption remains varied, with developed markets contracting and emerging market demand growth set to peak in 2025,” they added.
The analysts said in the report that their current forecast for global refined fuel demand calls for 1.4 percent annual growth in 2025, which they noted is a slight improvement on 2024’s estimated growth of 1.3 percent.
“Global economic growth is expected to be supportive of this forecast, with our Country Risk team forecasting global GDP growth of 2.6 percent for 2025, in line with expected growth seen in 2024,” they added.
The analysts warned, however, that “a myriad of potential risks could see economic growth change, impacting our fuel consumption outlook”
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