Geopolitical Windfall: BP Forecasts Extended Profitability from Oil and Gas

The recent focus on geopolitical stability and energy security is inadvertently creating an extended windfall for oil and gas, according to BP’s latest annual outlook. The energy major has increased its long-term demand forecasts, a move that validates its own strategic shift and confirms the world is unlikely to hit the 2050 net-zero target.
BP’s revised figures confirm the resilience of fossil fuels. Oil consumption in 2050 is now projected to hit 83 million barrels per day (b/d), an 8% increase from the previous 77 million b/d estimate. Natural gas demand is similarly forecast to remain elevated at 4,806 billion cubic meters annually in 2050. Furthermore, the company now expects oil demand to peak five years later, in 2030, at 103 million b/d.
BP’s chief economist attributes the sustained demand to conflicts in the Middle East and Ukraine, along with rising trade tariffs, which have intensified the need for national energy security. This security-first mandate may create some low-carbon ‘electrostates,’ but it strongly risks increasing preference for domestically produced fossil fuels over potentially volatile imports, thereby slowing global decarbonization.
The climate implications are dire. BP’s modeling indicates that the current energy trajectory will lead the world to breach the cumulative 2∘C carbon budget limit by the early 2040s. The report cautions that this delay significantly increases the economic and social costs required for future stabilization efforts. To stay on track for net-zero 2050, oil demand must drop drastically to approximately 35 million b/d by that date.
Despite rapid growth in wind and solar power—expected to meet over 80% of the increase in electricity demand by 2035—oil will maintain its market dominance. Oil is forecast to remain the single largest source of primary global energy supply, holding a 30% share in 2035. Renewables are not projected to surpass oil until the late 2040s, illustrating the formidable inertia that justifies BP’s strategic pivot toward ramping up hydrocarbon production.