The International Energy Agency (IEA) is warning governments and industry leaders that the global energy system is entering a period of heightened complexity, marked by rising security risks, shifting geopolitical influence and accelerating technological change. The findings are outlined in the World Energy Outlook 2025, the agency’s flagship annual assessment of global energy markets, policy pathways and long-term transitions.
Released amid a backdrop of volatile oil markets, geopolitical tension and rapid growth in clean energy deployment, this year’s Outlook centres on three scenarios that model distinct energy futures. Each framework evaluates the potential consequences of varying policy and investment decisions on affordability, emissions and energy security.
The IEA notes that its 2025 edition arrives at a pivotal moment. Across all scenarios, several trends consistently shape the global picture. First, the “centre of gravity” in global energy demand continues to shift away from China toward emerging economies including India, Southeast Asia, nations in the Middle East, and parts of Africa and Latin America. These regions are increasingly influencing energy flows, infrastructure needs and commodity markets.
The report also warns that energy security risks are broadening. Traditional concerns about oil and gas supply disruptions are now joined by vulnerabilities in critical mineral supply chains, where market concentration is exceptionally high. According to the IEA, critical minerals required for power grids, electric vehicles, batteries and AI chips face significant exposure, with a single country dominating refining for 19 out of 20 strategic minerals. Infrastructure risks linked to cyberattacks and extreme weather are also escalating.
Another defining theme is the accelerating “Age of Electricity.” Global electricity demand is projected to grow significantly faster than overall energy consumption in the coming decades, propelled by electrification of transport and industry. The IEA notes that the speed at which countries expand grid capacity, energy storage and other forms of flexibility will be central to maintaining reliability and affordability. Solar power remains the fastest-growing electricity source in every scenario, with most demand growth expected in regions with strong solar resources.
Despite persistent challenges, the IEA emphasizes that viable pathways remain for meeting both global energy access goals and international climate commitments. The Outlook includes a new roadmap for achieving universal access to electricity by 2035 and clean cooking by 2040—milestones seen as essential for economic development and health outcomes.
Beyond the long-term trends, near-term oil dynamics also point to turbulence. In its latest Oil Market Report, the IEA observes that oil market balances are becoming “increasingly bloated.” Global oil supply is expected to rise by 3.1 million barrels per day in 2025 and another 2.5 million barrels per day in 2026. Yet demand growth is forecast to remain below 800,000 barrels per day in both years, restrained by economic uncertainty and rising uptake of electric transportation. Petrochemicals continue to underpin demand growth, though 2024 performance has lagged expectations. At the same time, new sanctions on Russia and the global economic impact of tariff disputes introduce significant uncertainty.
Energy efficiency trends are also showing mixed progress. The IEA’s Energy Efficiency 2025 update notes that global primary energy intensity is on track to improve by 1.8 per cent in 2025, up from 1 per cent in 2024. While countries such as India and China show signs of stronger momentum, global progress remains well below the 4 per cent annual improvement goal agreed at COP28.
IEA leadership continues to emphasize collaboration with governments worldwide. Recent meetings between IEA Executive Director Fatih Birol and top officials from the European Commission, Romania and other member states highlighted shared concerns about competitiveness, diversification and energy security. At COP30 in Brazil, IEA representatives engaged with policymakers on electricity access, clean cooking and Brazil’s growing role in the global energy landscape.
Industry transformation is another area drawing attention. A new IEA report examining global automotive trends outlines how electric and hybrid vehicles have driven all recent growth in global car sales, while China’s dominance in both manufacturing capacity and market share continues to reshape competitive dynamics.
The agency is also supporting member countries in strengthening supply chains for rare earth elements—considered among the least diversified of all critical minerals—through new tools such as the IEA Critical Minerals Information Dashboard.
The IEA’s broad suite of recent publications underscores a central message: global energy systems are undergoing rapid and uneven change, with significant implications for security, economic competitiveness and climate goals. Policymakers and industry leaders face a fast-evolving landscape characterized by both unprecedented opportunity and rising risk.
