BP: The Road to Net-Zero is Paved with Geopolitical Uncertainty

The road to net-zero is now defined by geopolitical uncertainty, which is actively undermining the speed of the energy transition, according to BP’s latest annual outlook. The report raises long-term oil and gas demand forecasts, confirming that the world is likely to miss the crucial 2050 net-zero target.
BP’s revised figures indicate a persistent reliance on hydrocarbons. 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, BP has delayed the expected date of peak oil demand by five years, now projecting 103 million b/d in 2030.
BP’s chief economist details how global tensions—including the war in Ukraine, Middle East conflicts, and trade tariffs—are intensifying national demands for energy security. While this push for self-sufficiency might create low-carbon ‘electrostates,’ the report cautions that it also creates a strong incentive to rely on domestically produced fossil fuels over potentially volatile imports, thereby slowing global decarbonization efforts.
The report warns that the current slow pace has severe climate implications. BP’s modeling shows that the world is on a trajectory to breach the cumulative 2∘C carbon budget limit by the early 2040s. The company cautions that this extended delay significantly increases the economic and social costs required for future climate mitigation. To meet the 2050 net-zero goal, oil demand must drop aggressively to about 35 million b/d by that date.
Despite the necessary and rapid deployment of renewable technologies—which are set to meet over 80% of new electricity demand by 2035—oil will remain the largest single source of primary global energy supply, holding a 30% share in 2035. Renewables are not expected to surpass oil’s market share until the late 2040s, illustrating the deep structural inertia exacerbated by geopolitical forces.