- Oil demand could decline 20% and gas 10% by 2050 as countries prioritise energy security.
- Global dependence on imported fuels projected to halve as electrification, renewables and nuclear expand.
- Shift towards energy independence raises system costs and drives short term increase in coal use.
Prolonged disruption to Middle East energy supplies could accelerate a structural transformation of global energy systems, reducing oil demand by 20% and gas demand by 10% by 2050 compared to a base case scenario, according to new analysis from Wood Mackenzie.
The report finds that energy security concerns would drive countries to cut reliance on imported fuels by half, replacing them with domestically sourced energy through electrification, renewables, coal and nuclear power. This transition would reduce exposure to geopolitical risks but increase overall system costs.
The findings are based on a conflict scenario that assumes a major geopolitical escalation beginning in early 2026, disrupting 15% to 20% of global oil and LNG supply. In the short term, global oil demand is expected to fall by around 9% due to supply outages, before recovering to pre-crisis levels by 2030.
Source: Wood Mackenzie Lens ETS
Beyond 2030, structural shifts begin to reshape demand as governments accelerate efforts to achieve energy independence. Oil and gas consumption declines more rapidly than in the base case, while domestic and diversified energy systems gain momentum.
Electrification and energy efficiency emerge as central to this transition. While demand for electrolytic hydrogen declines, broader electrification across transport, buildings and industry offsets the reduction, keeping overall power demand broadly stable.
By 2050, the global energy mix is expected to undergo significant change. Oil demand falls by 20% and gas by 10%, while coal use increases by 20% as countries prioritise domestic supply. Nuclear generation rises by 40% above the base case, supported by both conventional and next generation technologies scaling from the 2030s. Renewable energy continues its rapid expansion, forming the backbone of domestic power systems.
In contrast, hydrogen and carbon capture deployment slows as policymakers favour more cost effective and secure energy pathways.
Coal plays a larger role in the near term as countries respond to supply disruptions by extending plant lifetimes and maximising domestic resources. Over time, nuclear energy takes on a greater role, providing stable baseload power as new capacity comes online.
Despite the shift, the move towards energy independence comes at a cost. Energy systems become more local and diversified but less economically efficient, increasing cost pressures for energy intensive industries while benefiting more self-sufficient regions.
In terms of climate impact, cumulative emissions under the scenario remain broadly aligned with the base case, tracking a 2.6°C warming trajectory. Although emissions rise in the short term due to increased coal use, they are offset over the longer term by stronger electrification and expanded nuclear capacity.
The analysis highlights a fundamental trade-off between short term energy security and long-term decarbonisation, with countries increasingly turning to proven, domestically controlled technologies to navigate an uncertain geopolitical landscape.
Author: Bryan Groenendaal
