- The International Energy Agency (IEA) has released its World Energy Outlook 2025, warning that countries are facing unprecedented energy security threats across a widening range of fuels, technologies and supply chains.
- The report urges governments to diversify energy supplies and strengthen international cooperation as geopolitical tensions and technology-driven risks reshape the global energy landscape.
Described as the world’s most authoritative source of energy analysis, this year’s Outlook evaluates three distinct scenarios for the coming decades. While not forecasts, the scenarios outline how different policy choices and investment strategies could affect energy security, affordability and emissions. Across all three pathways, the report identifies broad trends expected to shape the future of global energy markets.
One of the most significant shifts highlighted is the changing centre of gravity in global energy demand. Emerging economies, led by India and Southeast Asia and joined by countries across the Middle East, Africa and Latin America, are projected to play an increasingly dominant role. These regions are set to pick up where China, which has driven much of the world’s oil, gas and electricity demand growth since 2010, leaves off, although none are expected to replicate China’s rapid, energy-intensive industrial expansion.
Alongside this transition, the report warns that traditional oil and gas security risks are now compounded by vulnerabilities in critical mineral supply chains. A single country currently dominates refining for 19 of 20 key energy-related strategic minerals, with an average market share of 70%. These minerals are essential not only for power grids, electric vehicles and batteries but also for AI chips, defence systems and aeronautics. The IEA notes that reversing this high concentration will be slow without strong government intervention.
IEA Executive Director Fatih Birol said the scale and breadth of today’s energy security pressures are unprecedented, calling for the same level of political focus that led to the IEA’s creation after the 1973 oil crisis. He emphasised that governments must weigh security considerations alongside affordability, competitiveness and climate goals.
Electricity sits at the centre of the report’s analysis, with demand expected to grow far faster than overall energy use. The rapid rise of data centres and AI has pushed electricity consumption sharply higher in advanced economies, marking a break from past trends. Global investment in data centres is set to reach USD 580 billion in 2025, surpassing investment in oil supply. Yet while power generation investment has surged, grid and storage expansion remains too slow to meet future needs.
Renewables, especially solar PV, continue to outpace all other energy sources across every scenario. By 2035, 80% of the world’s growth in energy consumption is expected in regions with strong solar resources. Nuclear energy is also experiencing renewed momentum, with capacity projected to increase by at least one-third by 2035 through both traditional reactors and advanced designs like small modular reactors.
The WEO finds that global oil and gas supplies are robust in the near term. Oil prices remain relatively stable despite geopolitical fragility, while a major wave of new LNG export capacity, much of it in the United States and Qatar, is due online by 2030. However, the report cautions that complacency would be dangerous: both markets remain susceptible to geopolitical shocks, and shifts in policy or prices could quickly tighten supply.
On climate and energy access, the report paints a sobering picture. Around 730 million people still lack electricity, and nearly 2 billion rely on unsafe cooking fuels. A new WEO scenario charts a path to universal electricity access by 2035 and universal clean cooking access by 2040, with LPG playing a central role. But even in scenarios with steep emissions cuts, global temperatures are projected to exceed 1.5°C before stabilising later in the century.
The Outlook also highlights growing physical and cyber risks to energy systems. In 2023, disruptions to critical infrastructure affected more than 200 million households globally, with transmission and distribution grids accounting for 85% of incidents. Rising temperatures, extreme weather and cyberattacks underscore the urgent need to strengthen resilience.
Overall, the World Energy Outlook 2025 concludes that while profound risks lie ahead, countries still have opportunities to meet energy security, climate and access goals—provided they act decisively and collaboratively.
Link to the full report HERE
Author: Bryan Groenendaal
