According to research institutions, global energy demand may increase by more than 60% by 2060, and oil and gas will continue to play a significant role in this growth for a long time.

Global energy demand will continue to grow significantly, and the energy transition does not mean that traditional energy sources will be phased out quickly. Oil and gas will remain an important part of the global energy system for decades to come.

A recent report by S&P Global indicates that global energy demand may increase by more than 60% by 2060 compared to current levels, driven by emerging economies such as Brazil, India, Nigeria, and Indonesia. This growth will primarily be fueled by increased energy demand resulting from industrialization, urbanization, and rising incomes.

Meanwhile, renewable energy is expanding rapidly, but coal, oil, and gas will not be phased out quickly. Dan Yergin, Vice Chairman of S&P Global, stated that multiple energy sources will share the increased demand in the future energy system, and oil and gas will remain in use longer than many people expect.

Emerging economies drive continued growth in global energy demand.

S&P Global points out that emerging economies such as Brazil, India, Nigeria, and Indonesia are accelerating their industrialization and urbanization processes, leading to an expansion of energy production and import demand. The massive increase in energy consumption in these economies will be a significant source of global energy demand growth over the next few decades.

At the same time, renewable energy is rapidly gaining traction. By the end of 2025, 63% of emerging markets in Africa, Asia, and Latin America will have more solar power generation than the United States, with countries such as Brazil, Chile, El Salvador, Morocco, Kenya, and Namibia showing particularly rapid progress in their clean energy transition.

However, the growth in energy demand will not disappear with the expansion of clean energy. For economies that are still in the stage of industrialization and income growth, energy demand in the electricity, transportation and industrial sectors will continue to increase, and global energy consumption will therefore continue to present a pattern of multiple energy sources coexisting.

Funding and infrastructure constraints will hinder the energy transition, and oil and gas will remain a long-term investment.

While renewable energy is developing rapidly, insufficient funding and infrastructure remain major constraints on the energy transition of emerging economies. Even with the continued decline in clean energy costs, large-scale construction of power generation facilities, grids, and energy storage systems still requires huge upfront investments.

Katie Auth, Deputy Executive Director of the Energy for Growth Hub, pointed out that some emerging economies still face severe energy poverty, as their energy demand growth is closely linked to economic development, income increases, and job creation. Against this backdrop, it is difficult for these countries to skip the fossil fuel stage entirely.

Energy supply security has further reinforced this practical constraint. The oil and gas market volatility triggered by the closure of the Strait of Hormuz highlights the global energy system's reliance on traditional energy supplies. Dan Yergin stated that coal may gain more traction, while oil and gas will continue to be crucial for future energy demand.

Therefore, the global energy transition is more likely to manifest as a gradual adjustment of the energy structure rather than a rapid withdrawal of traditional energy sources. As energy demand continues to grow in emerging economies, the share of renewable energy will continue to increase, but oil and gas will remain important for a considerable period due to constraints such as funding, infrastructure, and energy security.

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