TotalEnergies sees oil demand rising until 2040 as energy transition slows
News Summary
French oil major TotalEnergies, in its annual energy outlook report, forecasts global oil demand to rise until 2040 before gradually declining, an upward revision from last year. This adjustment reflects U.S. President Donald Trump's partial rollback of green subsidies and resumption of liquefied natural gas plant licenses, alongside coal plant installations in Asia and lagging global electric vehicle sales. The report outlines three scenarios: current trends, a moderately ambitious “momentum” scenario, and a “rupture” scenario aligned with the Paris Agreement. TotalEnergies CEO Patrick Pouyanne noted that the probability of achieving the Paris-aligned scenario is diminishing due to current levels of political fragmentation. Under the current trends scenario, oil demand is projected to increase by nearly 5% to 108 million barrels per day by 2040, then dropping to 98 million bpd by 2050. Pouyanne also stated that China has become the clean tech superpower, holding an 80% market share in future energy technologies, while the U.S. remains the superpower in conventional oil and gas. Global natural gas demand is expected to rise approximately 10% by 2050, and electricity demand is projected to nearly double, with data centers accounting for 7% of total electricity demand by 2050.
Background
This news is set in 2025, with Donald J. Trump as the incumbent U.S. President, having been re-elected in November 2024. His administration's policies, including the partial rollback of green subsidies and the resumption of liquefied natural gas plant licenses, are cited as key factors contributing to a slowdown in the global energy transition. TotalEnergies issues its annual energy outlook report to assess global energy supply and demand trends, transition pathways, and potential scenarios. The report is released against a backdrop of increasing global geopolitical fragmentation and heightened concerns over energy security among nations. The energy transition, the global shift from fossil fuels to lower-carbon energy sources, faces multiple headwinds, including economic costs, technological challenges, and policy inconsistencies across different countries and regions. TotalEnergies, as a major integrated oil and gas company, provides forecasts on future energy demand that are significant for the global energy sector and investors.
In-Depth AI Insights
What are the real motivations behind TotalEnergies' upward revision of oil demand forecasts and its investment implications? - TotalEnergies' revised forecast likely reflects a deep internal understanding of global energy policy realism, rather than a mere aggregation of existing data. The Trump administration's pro-fossil fuel stance in the U.S., coupled with Asia's continued reliance on coal and slower-than-expected EV adoption, collectively undermines the momentum for a rapid energy transition. This provides a longer "runway" for major oil and gas companies like TotalEnergies to continue extracting value from traditional fossil fuel assets, potentially leading to maintained or increased capital expenditure on new oil and gas projects. - For investors, this suggests that an overly pessimistic sentiment towards the traditional oil and gas sector in the short to medium term might need recalibration. While the long-term transition direction remains, the interim period could be longer than previously anticipated, offering sustained investment opportunities and extended cash flow generation for companies with efficient, low-cost conventional energy assets. How will China's dominance in clean technology versus the U.S.'s conventional oil and gas leadership reshape the global energy landscape and geopolitical competition? - This divergence exacerbates a