WEO 2025 Puts Energy Security First. Its Return of the Current Policies Scenario Is a Warning, Not a Forecast

The International Energy Agency's World Energy Outlook 2025, released on 12 November, opens with a statement that sets the tone for the whole report: in a volatile world, energy security takes centre stage. The agency describes a backdrop of geopolitical fragility coexisting with subdued oil prices and a large surplus of oil supply over demand, countries prioritising security and affordability but reaching for different levers, fractures in the international trading system, and less momentum behind efforts to reduce emissions even as climate risks rise.

It notes that 2024 was the hottest year on record and the first in which global temperatures exceeded 1.5 degrees Celsius above pre-industrial levels. The most discussed change is the return of the Current Policies Scenario, which models only policies already enacted and takes a cautious view of how fast new technologies are deployed. In that scenario, oil demand keeps rising to 113 million barrels a day in 2050, and gas demand grows to mid-century.

The IEA stresses that none of its scenarios is a forecast, and identifies several features common to all of them. The IEA highlights a striking geographic fact: by 2035, 80 per cent of energy consumption growth occurs in regions with high-quality solar irradiation. Investment in electricity generation has risen by almost 70 per cent since 2015 to about USD 1 trillion a year, but grid spending has risen at less than half that pace, to USD 400 billion.

In the near term, oil markets look well supplied, thanks to growing output from the United States, Canada, Guyana, Brazil and Argentina, and muted demand growth. For gas, the IEA notes an unprecedented 300 billion cubic metres of new annual LNG export capacity scheduled to start operating by 2030, a 50 per cent increase in available global supply, around half of it in the United States and a further 20 per cent in Qatar. For a country like Pakistan, or for many importers in South and Southeast Asia and Africa, the scenarios carry a clear message.

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