Energy analysts predict 2025 will be a year of volatility in the energy sector, with geopolitical tensions and policy changes impacting oil and gas markets. While the IEA sees easing prices and increasing spare capacity, Rystad Energy highlights the potential for shifting policies due to global elections. The US oil industry may not respond to domestic production stimulus, but LNG infrastructure investments could see growth.
At more than four million barrels a day, Canadian crude makes up about half the supply imported into the U.S. A motorist drives past the CHS oil refinery on Sept. 28, 2024, in McPherson, Kan.While 2024 was hardly a year of global stability, energy analysts say 2025 could bring more volatility, geopolitical tension and policy evolutions.
Jarand Rystad, the founder and chief executive of Rystad, looked into his crystal ball in a recent research note. Indeed, a recent study by S&P Global found that although LNG was never really meant to be a U.S. export, the industry has contributed US$408-billion to the country’s gross domestic product since 2016. It’s poised for even more growth, according to the study, on track to contribute US$1.3-trillion to GDP by 2040.
“It comes down to: The type of quality that U.S. refineries need is what we have here in Canada, and to apply a tariff on that doesn’t make sense when you can’t produce it yourself,” said Jeremy McCrea, analyst at BMO Capital Markets. Mr. Rystad and the IEA reckon the push for decarbonization will continue in 2025, even as economic instability, evolving energy demands and infrastructure constraints present challenges along the way.
“The era of China driving oil consumption growth is over, with the country’s peak diesel in the rear-view mirror, gasoline demand plateauing and coal consumption levelling off, as it is globally,” he wrote.
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