In an increasingly complex energy security landscape, encompassing a wide range of fuels and technologies, the World Energy Outlook 2025 identifies the most important choices, opportunities and trade-offs facing governments today.
Countries around the world are facing growing energy security threats, along with long-term risks across an unprecedented range of fuel sources and technologies, making energy issues at the center of geopolitical tensions and one of the most important elements of economic and national security.
A recent report by the International Energy Agency (IEA) emphasizes the need for governments to diversify sources of supply and strengthen international cooperation to counter rising uncertainty and disruption.
The 2025 Report, the world's leading authority on energy analysis and forecasting, covers a wide range of pathways, highlighting opportunities and vulnerabilities common to countries through three main scenarios - not deterministic projections - but alternative models that show the effects of different policies, investments, and technologies on energy security, costs, and emissions.
A common trend across all scenarios is the rising global demand for energy services over the coming decades - both in transportation, heating, cooling and lighting, as well as in industrial and domestic uses, and the growing demand for data and artificial intelligence (AI) services.
Emerging economies, led by India and Southeast Asian countries and joined by the Middle East, Africa and Latin America, will play an increasing role in shaping the dynamics of energy markets over the coming years, with China accounting for half of global oil and gas demand growth and 60 percent of electricity demand growth over the past decade. However, no country is capable of replicating China's energy-intensive trajectory.
With these shifts, traditional oil and gas supply risks are no longer the only focus of attention. New vulnerabilities have emerged in critical metals supply chains due to high market concentration. A single country dominates the refining of 19 out of 20 energy-related strategic metals, with a market share of about 70%. These metals are essential for power grids, batteries, and electric vehicles, as well as for artificial intelligence chips, aircraft engines, defense systems, and other critical industries. The concentration of refining has also increased since 2020, especially in nickel and cobalt, calling for stronger action from governments to address this imbalance.
The IAEA's Executive Director, Fatih Birol, said: "Throughout the history of energy in recent decades, there has never been a period when energy security has faced so many simultaneous challenges across so many fuels and technologies. "We need the same spirit of focus that governments showed when the IAEA was established after the 1973 oil shock."
Governments must consider the balance between energy security and other objectives such as cost, accessibility, competitiveness and combating climate change, he said, adding that the World Energy Outlook provides a data-driven analytical framework to guide the debate on the optimal path forward.
Electricity is the heart of modern economies, with demand growing much faster than overall energy demand in all scenarios. Investors are mirroring this trend, with investments in electricity generation and final electricity accounting for half of total global investment in the energy sector today. Although electricity currently accounts for only about 20% of total final energy consumption, it is the main source of energy for sectors covering more than 40% of the global economy, and for most households around the world.
Birol said: "In previous reports we have said that the world is entering the age of electrification - and today it has become a reality. After a decade of electricity consumption growth being dominated by developing economies, developed countries are now seeing a surge in demand driven by data and artificial intelligence. Global investment in data centers is expected to reach $580 billion in 2025, surpassing the $540 billion spent on global oil supply - a striking indication of the shifting nature of modern economies."
The report notes that one of the central issues in the electricity era is the speed with which new networks, energy storage and sources of resilience in electricity systems are being built, as investments in these areas remain underinvested. While investments in electricity generation have increased by 70 percent since 2015, spending on transmission and distribution networks has only increased by half that percentage.
Although the pace of growth varies between the three scenarios, renewable energy is growing faster than any other source, led by solar energy. Analyses suggest that 80% of global energy consumption growth by 2035 will occur in regions with high solar radiation. The report also sees a resurgence of interest in nuclear power, with investments in conventional reactors and new designs such as small modular reactors on the rise. After more than two decades of stagnation, global nuclear capacity is expected to rise by at least a third by 2035.
The report shows that global oil and gas supplies are adequate in the near term, with markets reflecting this balance despite their geopolitical fragility, with oil prices remaining in the $60-65 per barrel range. A similar balance is expected in natural gas markets as new liquefied natural gas (LNG) projects come online.
2025 has seen a jump in investment decisions for LNG projects, which will add nearly 300 billion cubic meters of annual export capacity by 2030 - a 50% increase in global supply. Half of this capacity is being built in the US and another 20% in Qatar. While global gas demand has been revised upwards, questions remain about where this surplus gas will go.
The report warns against resting on this temporary equilibrium, as oil and gas markets remain vulnerable to geopolitical risks, and any acceleration in demand as a result of a reversal of energy transition policies or lower prices could quickly undermine the current stability.
In two key areas analyzed in the report - universal energy access and combating climate change - the world is lagging behind its targets. Some 730 million people are still without electricity, and nearly two billion people rely on unhealthy cooking methods. The report proposes a new pathway that aims to achieve universal access to electricity by 2035 and clean cooking by 2040, with a key role for liquefied petroleum gas (LPG).
The report also shows that the world will exceed the 1.5°C warming threshold in all current scenarios, even the most ambitious emissions reductions. The energy sector will have to adapt to the security risks of rising temperatures, but the worst consequences can be avoided by achieving carbon neutrality by mid-century, which could bring temperatures back below 1.5°C in the long term.
The report concludes by emphasizing that energy systems are facing the current impacts of climate change, which calls for enhanced resilience to climate disasters, cyber-attacks and malicious activities. According to new data, the disruption of critical energy infrastructures in 2023 affected more than 200 million households around the world, with electricity networks being the most vulnerable, with damage to transmission and distribution networks accounting for 85% of recorded incidents.
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