- The International Energy Agency (IEA) has warned that governments face mounting energy security threats spanning oil, gas, electricity, and critical minerals, according to its World Energy Outlook 2025 report released today.
The report highlights that energy has become central to geopolitical tensions, urging countries to diversify supplies and deepen cooperation to manage growing risks.
“Energy security tensions now affect more fuels and technologies than ever before,” said IEA Executive Director Fatih Birol, calling for the same level of policy coordination seen after the 1973 oil crisis.
The report presents three scenarios for the global energy future, exploring how different policy and investment paths could shape security, affordability, and emissions. Across all scenarios, electricity demand grows faster than overall energy use—driven by data centres, artificial intelligence, and electrification in households and industry.
Global investment in data centres is projected to hit $580 billion in 2025, surpassing spending on oil supply for the first time. Yet, the IEA warns that grid expansion and storage are lagging behind generation capacity, posing a new security challenge in what Birol calls the “Age of Electricity.”
The report also notes a surge in renewable energy, led by solar power, and a revival of nuclear energy, with global nuclear capacity expected to rise by one-third by 2035.
Meanwhile, new LNG projects are boosting global gas supply, with the U.S. and Qatar accounting for most of the growth. Oil and gas prices remain stable for now, but the IEA cautions that geopolitical shocks could quickly disrupt markets.
In critical minerals, the agency warns of extreme dependence on a single country for refining 19 of 20 key materials essential for clean energy and defence industries.
Despite progress, the world remains off track on universal energy access and climate goals. Around 730 million people still lack electricity, and the IEA projects global temperatures will surpass 1.5°C of warming in all scenarios before potentially declining later in the century.
Other highlights:
- Among the many trends common to all the scenarios in this year’s WEO is the world’s growing need for energy services over the coming decades – with demand rising for mobility; for heating, cooling, lighting and other household and industrial uses; and increasingly for data and AI-related services.
- In particular, a group of emerging economies – led by India and Southeast Asia and joined by countries in the Middle East, Africa and Latin America – comes to increasingly shape energy market dynamics in the years ahead. Collectively, they take up the baton from China, which accounted for half of global oil and gas demand growth and 60% of electricity demand growth since 2010.
- Amid these shifts, traditional energy risks are now accompanied by vulnerabilities in other areas – most visibly in supply chains for critical minerals, which are vital for power grids, batteries, EVs and more. A single country is the dominant refiner for 19 out of 20 energy-related strategic minerals, with an average market share of around 70%.
- The Age of Electricity is here. Across all WEO scenarios, electricity demand grows faster than overall energy use – and it is no longer limited to emerging and developing economies, with breakneck demand growth from data centres and AI helping to drive up electricity use in advanced economies, too. Global investment in data centres is expected to reach $580 billion in 2025, surpassing the $540 billion being spent on global oil supply. These trends will require faster installation of new grids, storage and other sources of power system flexibility to ensure energy security.
- Although the pace varies across the different WEO scenarios, renewables grow faster than any other major energy source in all of them, led by solar PV. Nuclear energy also sees a revival of fortunes across all scenarios after more than two decades of stagnation.
- All scenarios indicate ample global supplies of oil and gas in the near term. Oil markets already reflect this, and a similar easing of market balances for natural gas appears imminent as new projects for liquefied natural gas exports come online. Even so, both markets remain exposed to geopolitical risks, while faster demand growth – in response to weaker energy transition policies or lower prices – could quickly erode what buffers they have.
- The world is falling short on the goals it set for itself on universal energy access and climate change. However, a new scenario in the 2025 edition outlines a country-by-country pathway to reaching universal access to electricity in 2035 and to clean cooking in 2040.
- And while the WEO-2025 shows the world surpassing 1.5°C of warming in any scenario in the nearer term, it still sees scope for avoiding the worst climate outcomes. The updated net zero scenario brings temperatures back below 1.5°C in the long term.
- Amid growing energy security risks, resilience is more important than ever. Disruptions to critical energy infrastructure in 2023 affected more than 200 million households around the world – with power lines proving particularly vulnerable.
- Noting the urgent security challenges front and centre for today’s energy policy makers, the report calls for the same spirit and focus that governments showed when they created the IEA after the 1973 oil shock.
The report concludes that governments must act urgently to strengthen energy system resilience to climate impacts, cyberattacks, and supply disruptions.
Link to the full report HERE
Author: Bryan Groenendaal
