Why the Global Methane Pledge Is Falling Short

By Felicity Bradstock - Nov 02, 2025

• The Global Methane Pledge, launched at COP26, aimed to cut global methane emissions by 30% by 2030, but progress has stalled.
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• UN satellite data reveals over 14,000 methane leaks, with nearly 90% going unaddressed by governments and fossil fuel companies.
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• Ahead of COP30, experts warn that without stronger monitoring, enforcement, and political will, global climate targets will be impossible to meet.

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The Global Methane Pledge was launched at the COP26 climate summit to accelerate the reduction of carbon emissions worldwide. However, since joining the pledge, many countries have failed to cut their methane emissions at the rate needed to meet global warming reduction targets. While the focus of climate change is often centred around carbon emissions, the fact that methane heats the planet up to 80 times more than carbon dioxide over two decades is less widely discussed. Methane has contributed around 30 percent of the increase in global temperatures since the Industrial Revolution. The energy sector accounts for over 35 percent of the methane emissions from human activity, meaning that a transition from fossil fuels to green alternatives could help to significantly cut emissions.

The Global Methane Pledge was introduced in 2021, led by the United States and European Union and signed by 111 countries, which, together, contribute around 45 percent of global human-caused methane emissions. The pledge states the aim of reducing methane emissions by at least 30% below 2020 levels by 2030. For several countries that joined the pledge, this was their first policy commitment to reduce methane emissions.

While the pledge is non-binding, the U.S. and EU requested that all participants develop or update a national methane reduction action plan by COP27 in 2022. However, the pledge does not state any specific actions or steps for member states to take. Some of the countries that emit the highest levels of methane each year, such as China, India, and Russia, have not yet joined the pledge. However, China did commit to developing a “comprehensive and ambitious National Action Plan on methane, aiming to achieve a significant effect on methane emissions control and reductions in the 2020s.”

Participant commitments to methane reduction vary significantly. For example, Canada announced plans to reduce methane emissions from the oil and gas sector by at least 75 percent from 2012 levels by the end of the decade. Meanwhile, some countries, such as Iran, have yet to establish any methane reduction strategies to date.

The United Nations also developed a scheme for oil and gas companies to measure and report their methane emissions, with 154 companies currently enrolled, representing around 42 percent of global oil and gas production. In 2025, the firms reported 2.5 million tonnes of methane emissions, which was higher than the previous year. However, the UN noted that around four-fifths of companies fail to report their emissions accurately. Despite over a hundred countries joining the pledge, as well as the launch of the company's emissions reporting scheme, the world is falling short on cutting global methane emissions.

A recent report by the UN showed that methane emissions are not falling fast enough to meet the 2010 reduction target. Satellite imagery from one UN programme revealed that there are over 14,000 methane leaks worldwide. The UN said that nearly 90 percent of satellite-detected methane leaks being reported to governments and fossil fuel companies are not being addressed. The International Methane Emissions Observatory achieved a 12 percent response rate from 3,500 alerts from leaks detected. In addition, most methane leaks are too small to be detected by satellites, suggesting that global emissions are far higher than satellites can show.

Inger Andersen, the executive director of the UN Environment Programme, which oversees the observatory's Methane Alert and Response System, said, “Actions remain too slow… We are talking about tightening the screws in some cases,” in reference to methane leaks from oil and gas venting and flaring. Andersen added, “We can't ignore these rather easy wins.”

Under President Trump, the U.S. has pulled back on methane emissions targets, despite its leading role in the methane pledge. The Trump administration has proposed ending pollution reporting requirements and has halted plans to begin taxing methane emissions.

Recently, investors representing over $5.3 trillion of assets encouraged the EU not to weaken its methane emissions law, owing to concerns that the bloc may relax the rules to support higher levels of LNG imports from the United States, aimed at easing trade tensions.

Despite the failure to reduce global methane emissions at an accelerated rate, the UN report did highlight that many energy companies were improving the quality of their methane reporting. The report stressed the importance of accurate reporting, “Reliable measurement-based data is required not only to guide effective and efficient mitigation, but also to track changes in emissions over time and assess progress toward climate goals.”

The UN’s report comes just weeks ahead of the COP30 climate summit in Brazil and emphasises the need for greater discussion around methane emission reduction efforts. COP30 could provide the necessary platform to establish clear international goals for methane emissions cuts and encourage countries and companies to improve monitoring and reporting mechanisms to help meet global 2030 targets.

By Felicity Bradstock for Oilprice.com

Energy Transition Stalls 10 Years After Paris Agreement

By Tsvetana Paraskova - Nov 02, 2025

• A decade after the Paris Agreement, the global transition to clean energy is slowing despite record renewable capacity installations, due to geopolitical, financial, and regulatory challenges.
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• China maintains its leadership in clean energy investment and installations, while the EU continues its decarbonization efforts amid rising costs and political resistance, and the U.S. has scaled back its clean energy incentives.
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• The upcoming COP30 summit in Brazil will address these challenges, with the host country promoting sustainable fuels while simultaneously planning an expansion of its upstream oil sector, highlighting the complex realities facing large energy markets.
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Ten years after the landmark Paris Agreement to pursue net-zero emissions by 2050, the world faces a slowing transition to clean energy despite record-breaking renewable capacity installations.   

Much has changed in the energy systems in the decade since the Paris Agreement was signed in 2015. These systems faced a global pandemic, the first war in Europe since WWII, an energy crisis, a U.S. government that questioned climate change, and backlash against net-zero policies in banking and equity investment.   

Some things have remained constant. One is China’s undisputed leadership in clean energy investment and installations, and cheaper domestically-manufactured equipment, allowing the rollout of solar and wind power capacity at much lower costs compared to Europe and the U.S. 

The other constant is the EU’s unwavering insistence on decarbonizing to achieve net-zero emissions across its economies by 2050, despite soaring costs and growing political resistance to intermediate targets and warnings from trade partners that the burdensome EU climate directives on emissions and carbon prices could undermine its energy supply. Last week, the United States and Qatar joined forces for a fresh warning to Brussels that its corporate sustainability directive risks LNG imports from two of the world’s biggest exporters at a time when the EU is seeking to ban all Russian gas imports. 

All these developments are taking place amid growing uncertainty – both financial and regulatory – for clean energy developers. 

U.S. President Donald Trump pulled the United States out of the Paris Agreement – twice, on Day One of each of his terms in office. Coinciding with President Trump’s inauguration in 2025, banks started quitting net-zero alliances and stopped the previously very vocal pledges to cut off financing for fossil fuels, with a U.S. Administration, which is now openly hostile toward clean energy solutions, especially offshore wind, and which drastically scaled back U.S. renewable energy and EV incentives. 

Amid geopolitical, financing, cost, and regulatory challenges to clean energy, Brazil is hosting the annual global climate summit COP30 in Belem from November 10 to 21. 

Ten years after Paris, COP30 will take place as renewable energy installations soar to record highs, but investment and capacity additions are not yet on track for net zero or for any other intermediate or renewable energy goal. 

“Some countries are quietly wavering on their climate commitments on the eve of the meeting while the US very loudly questions the entire concept of global warming,” Ethan Zindler, Countries and Policy Research at BloombergNEF, says. 

Despite the record-high investments into clean energy technologies and soaring solar power installations, “the transition to a lower-carbon economy is not moving nearly fast enough to deliver on the ambition for net-zero emissions agreed in Paris a decade ago,” BloombergNEF noted. 

In the first half of 2025, China remained the world’s top market for renewable energy investment, accounting for 44% of the global total, BNEF has estimated. The U.S. U-turn in policy, on the other hand, may prompt developers and investors to reallocate capital from the United States to Europe, according to the research provider. 

Ahead of COP30, the International Renewable Energy Agency (IRENA), the COP30 Brazilian Presidency, and the Global Renewables Alliance (GRA) said in an October report that the world is falling behind on its renewable energy and efficiency goals despite record progress last year.

The global progress report flagged bottlenecks in investment, grids, and supply chains, and urged governments for bolder renewable targets before COP30. 

The climate summit in Brazil is not without controversies, as were the previous two editions held in major oil and gas producing countries, the UAE and Azerbaijan. 

The host country, Brazil, South America’s top oil producer and exporter, is expected to push for the Belém Commitment for Sustainable Fuels—known as Belém 4x—an initiative aimed at building high-level political support for the global goal of quadrupling the production and use of sustainable fuels by 2035.  

But “Brazil faces a fundamental contradiction as it prepares to host COP30: leading the world in sustainable fuels while simultaneously planning an expansion of its upstream sector,” David Brown, Director, Energy Transition Research at Wood Mackenzie, said this week. 

“This tension reflects the complex realities facing large energy markets and companies.”   

By Tsvetana Paraskova for Oilprice.com

Why the World’s Coal Addiction Won’t End Anytime Soon

By Felicity Bradstock - Nov 02, 2025

• Global coal demand rose 1.5% in 2024 to an all-time high of 8.79 billion tonnes, mainly driven by China and India.
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• Despite growing renewable capacity, rising electricity demand kept coal-fired power generation at record levels.
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• Experts warn that unless coal use declines sharply, the world will fail to meet the 1.5°C climate target set by international agreements.

While many countries around the globe pledge to transition away from fossil fuels to renewable alternatives, the use of coal for power generation has once again risen. Several governments have committed to cutting coal production and use over the coming decades, due to its reputation as the “dirtiest fossil fuel”. Coal is being increasingly replaced with less-polluting fossil fuels, such as natural gas, as countries gradually expand their renewable energy sectors to transition towards green energy. However, it seems that despite big promises and heavy investment in alternative energy sources, coal use remains high.

Global coal use rose to a record high in 2024, which will likely have a negative impact on global warming. For several years, governments worldwide have been introducing policies aimed at reducing coal use to help tackle climate change. While the contribution of coal for electricity production fell as the global renewable energy capacity increased, the overall increase in power demand led to more coal being used for power last year, according to the recently published annual State of Climate Action report.

In 2024, global coal demand rose by 1.5 percent compared to 2023, to reach an all-time high of 8.79 billion tonnes. The increase was driven mainly by emerging economies in Asia, particularly China and India. China’s demand rose by 82 million tonnes (Mt), or 1.7 percent, while India’s use grew by 45 Mt, or 4 percent. Indonesia and Vietnam also experienced a rise in coal demand. Meanwhile, the European Union saw a decrease in coal use by 40 Mt, or 11 percent, while the United States saw a 14 Mt, or 4 percent, reduction, as many coal plants were retired and renewable energy capacity grew.

As countries in Europe and North America decrease their dependence on coal, other regions, principally Asia, are expected to continue relying heavily on coal for years to come. China, India, and the Association of Southeast Asian Nations (ASEAN) countries contributed around 77 percent of the 2024 global coal demand.

Coal-fired power generation, the principal driver of global coal demand, also reached a record high in 2024, at around 10,766 TWh. Meanwhile, the use of coal in iron and steel production remained fairly stable. China has a significant impact on the world’s coal consumption, using around 30 percent more of the fossil fuel than the rest of the world combined. Much of its coal is used to power its expansive manufacturing industry.

The report suggested that while many governments are making a clear effort to decrease their reliance on coal, in favour of renewable alternatives, the world is not transitioning at a fast enough rate to meet international greenhouse gas reduction targets by the mid-century.

“There’s no doubt that we are largely doing the right things. We are just not moving fast enough. One of the most concerning findings from our assessment is that for the fifth report in our series in a row, efforts to phase out coal are well off track,” said Clea Schumer, a research associate at the World Resources Institute thinktank. “The trouble is that a power system that relies on fossil fuels has huge cascading and knock-on effects… The message on this is crystal clear. We simply will not limit warming to 1.5°C if coal use keeps breaking records,” explained Schumer.

At the COP26 climate summit in 2021, governments agreed to “phase down” the use of coal as part of the “Glasgow climate pact”. Despite changing the language last minute, from a “phase-out: to a “phase-down”, government representatives at the conference made a clear commitment to reduce their reliance on coal. While many environmentalists were disappointed by the decision to water down the language, most thought it signalled the end of the coal era.

At the time, the executive director of the International Energy Agency, Fatih Birol, said that over 40 percent of the world’s existing 8,500 coal plants would need to close by the end of the decade, and no new ones could be built, to stay within the global heating limit of 1.5°C. Birol stated, “I would very much hope that advanced economies take a leading role and become an example for the emerging world. If they don’t do it, if they don’t show an example for the emerging world, they shouldn’t expect the emerging world to do it.”

However, the view of coal use varies significantly from country to country. Despite its commitment to reducing greenhouse gas emissions over the coming decades, India sees coal as a major contributor to the industrial expansion needed to support the country’s economic growth. India’s prime minister, Narendra Modi, celebrated surpassing 1 billion tonnes of coal production earlier this year. Meanwhile, United States President Donald Trump has backtracked on the Biden administration’s climate efforts, instead declaring his support for coal and other fossil fuels this year.

The failure to reduce coal consumption at the rate needed to meet international climate pledges demonstrates the need to reinforce the commitment to phasing down coal use in the upcoming COP30 UN climate summit in Brazil. In addition, greater efforts must be taken to support emerging economies in transitioning to green without compromising economic growth reliant on the use of fossil fuels. 

By Felicity Bradstock for Oilprice.com

 SCI-FI-TEK 70 YRS IN THE MAKING

Merz Action Plan Aims for World's First Commercial Fusion Reactor

By Haley Zaremba - Nov 02, 2025

• Germany has announced a €1.7 billion investment in nuclear fusion, aiming to develop the world's first commercial fusion reactor, a significant reversal of its long-standing anti-nuclear energy stance.
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• This policy shift is driven by Germany's ambitious decarbonization goals and the need to overhaul its energy mix, moving away from heavy reliance on fossil fuels.
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• The investment positions Germany at the forefront of a global technology race in nuclear fusion, a field experiencing major breakthroughs and considered crucial for future energy sovereignty.
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Germany just made a huge bet on nuclear fusion, putting an exclamation point at the end of its historic u-turn on nuclear energy policy. A new action plan from Chancellor Friedrich Merz aims to ensure that the world’s first commercial fusion reactor and throws €1.7 billion ($1.98 billion) in funding behind the cause. The unexpected announcement is making major waves in what is already a conflicted political environment when it comes to energy planning.

This announcement comes as something of a shock considering that Germany has been Europe’s staunchest nuclear energy opponent for years. Germany decommissioned its last three nuclear power plants offline in 2023, and has – until very recently – stood firmly unified in this resolve. "We have decided to phase out nuclear power. This has also been accepted by society," the nation’s Environment Minister Carsten Schneider told Deutsche Welle (DW) just a few months ago. "There are no further commitments [to the nuclear industry], nor will there be any," he went on to say.

But cracks have been showing in that unified front for a while now. Back in May, German Economy Minister Katherina Reiche publicly said that she was "open to all technologies,” marking a major departure from Germany’s traditional stance. Even more surprising, Germany ceded its side of a long-standing nuclear energy cold war with France, agreeing to make peace with French officials by dropping anti-nuclear power rhetoric from European Union legislation. 

Even against this backdrop, however, Germany’s bid to become the preeminent global superpower for nuclear fusion technology is a surprising one. But though it’s politically fraught, the plan has logical strategic grounding. An ambitious approach to clean energy production is absolutely necessary if Germany has any hope of meeting its decarbonization goals. As Europe’s largest economy, Germany’s greenhouse gas footprint is also pivotal to the wider climate goals of the European Union. The pressure is on for the nation, which currently relies heavily on fossil fuels, to overhaul its energy mix in the coming years.

Sarah Klein, commissioner for fusion research at the Fraunhofer Institute for Laser Technology in Aachen, told DW this week that investing in fusion technology is a "smart long?term strategic bet” that “keeps Germany at the forefront of a global technology race.” She added that in tandem with renewable energy development, nuclear fusion is “crucial for ensuring energy sovereignty after the phaseout of fossil fuels.”

Germany’s policy shift comes as part of a sea change of nuclear energy sentiment in Europe and abroad. Just this year, Italy and Denmark began motions to overturn their respective 40-years ban on nuclear energy production, and the government of Spain indicated that they were considering extending the lives of domestic nuclear power plants slated for phaseout. 

The shift also comes at a time of major technological breakthroughs in the field of nuclear fusion science. Researchers around the world are racing to achieve commercially viable nuclear fusion, and they are getting closer all the time. China, in particular, is investing heavily in fusion research and development and aims to achieve viability by 2050. Labs in the United States are also breaking record after record for achieving net positive energy production from their laser-based fusion models. 

The ramifications of any country or project achieving commercial nuclear fusion are difficult to overstate. In the words of a Daily Galaxy report from earlier this year, “If China or any other nation succeeds in making fusion commercially viable, it could trigger an energy revolution, transforming how the world powers homes, industries, and even space exploration.”

And, of course, it means a major geopolitical leg up for the country that gets there first. As a result, even Germany, once the world’s biggest anti-nuclear government, is now throwing its hat into the crowded ring. 

By Haley Zaremba for Oilprice.com

 

How Artificial Intelligence Is Powering a New Industrial Boom

By Irina Slav - Nov 02, 2025

• A new ADNOC–Microsoft report finds 87% of energy firms are increasing AI and digital spending, with one-fifth already using agentic AI.
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• Energy leaders see AI as a force for good - even as it doubles data center electricity use and pressures global grids.
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• Oil giants like ADNOC and Aramco are investing petrodollars into AI, betting on the technology to enhance efficiency, emissions monitoring, and long-term growth.
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Concern has been rising that artificial intelligence is killing jobs, and there is evidence to support this. But in the energy industry, executives are loving AI. A fifth of energy companies are already using the technology, and an overwhelming majority of executives believe AI is a force for good. For energy, it has been. AI is driving energy demand much higher than ever before, and it has reasserted the reliability of supply as a top priority.

In a report released this week, the UAE’s ADNOC and Microsoft reported that 87% of companies they surveyed are spending more on artificial intelligence and digital infrastructure. What’s more, a fifth of these companies are now using agentic AI, capable of making complex decisions. “But agentic AI is more than a technical upgrade, it’s a signal that AI is becoming a strategic capability across the energy value chain,” ADNOC and Microsoft reported.

Survey respondents in China and India were especially positive towards artificial intelligence, the report reveals. All Chinese respondents viewed AI as a force for good, along with 92% of Indian respondents. The rest of the world also demonstrated strong enthusiasm for AI, with positive attitudes in Australia and Japan at 87%, falling to 83% for the United States.

As for expectations, everyone that ADNOC and Microsoft surveyed appears to be certain that the growing use of artificial intelligence would drive energy demand higher. To respond to this higher demand, the energy industry needs to start working now to ensure reliable, affordable, and—according to the report—sustainable energy supply for the future.

“Grid capacity remains a potential bottleneck to expanding the digital infrastructure supporting AI,” the authors of the report wrote. “Global data centers account for around 1.5% of the world’s electricity consumption and could double by 2030 to 945 TWh1. This represents approximately 10% of total global electricity demand growth, requiring both new generation and better use of existing assets.”

The energy consumption aspect of artificial intelligence has prompted serious concerns from climate change advocacy circles, as it has spurred a race to secure baseload power generation capacity, meaning gas, coal, and nuclear. Some from the industry, however, believe that AI itself is instrumental for the energy transition by helping transform the grid and improve power generation and distribution, while keeping energy affordable.

“From optimising grids to scientific breakthroughs, AI can help advance the shift to reliable, affordable renewable energy - unlocking the full potential of AI to benefit everyone,” OpenAI’s VP of Global Business, Nate Harbacek, who was among the respondents to the Adnoc/Microsoft survey, said.

This ambition to have AI make alternative energy sources as reliable as baseload generation is not new. So far, however, it seems to have taken the form of so-called demand response only. This means that because wind and solar installations cannot generate around the clock, consumers of electricity need to adjust their consumption habits to match generation patterns. Of course, these are the early days of the Intelligence Age, as OpenAI’s Harbacek calls it, and industries may yet find other, less controversial ways to ensure reliable and affordable energy for everyone.

In the meantime, the energy industry is eager to supply the energy that the AI industry needs. According to the survey, 71% of business executives believe AI proliferation would lead to an increase in global energy consumption in 2030. A minority of 12% believe it would actually lead to a decline in global energy consumption, which at this point is a rather eccentric view. Over a longer horizon, however, more business leaders believe AI would lead to lower energy consumption, with 27% of respondents sharing this belief. Still, a majority of 54% believe that even in 2050, AI will be a drain on energy.

This is good news for the industry to which ADNOC and many of the respondents to its survey belong. In fact, ADNOC and sector players in the Middle East are helping the AI industry grow by investing in it directly. Bloomberg reported on the trend this week, saying the Emirati state oil company, along with Aramco, were “ramping up work with their countries’ national AI champions, using petrodollars to meet the growing need for capital in the race to lead the technology.”

For energy producers, this is akin to securing long-term supply deals with refiners, so chances are that there will be more petrodollars flowing into artificial intelligence projects going forward. Per the respondents to the ADNOC/Microsoft report, it will be money well spent: AI seems to be almost too good to be true, being equally good at boosting operating efficiencies, keeping a lid on costs, and helping with emission monitoring and reduction. The main challenge on the road to the Intelligence Age seems to be a shortage of a skilled workforce to make the best of AI’s capabilities.

By Irina Slav for Oilprice.com

ADNOC Expands Gecko Robotics Partnership to Advance AI and Energy Innovation

By Charles Kennedy - Nov 02, 2025

Abu Dhabi National Oil Company (ADNOC) has expanded its partnership with U.S.-based Gecko Robotics through three new agreements aimed at accelerating the use of artificial intelligence (AI) and robotics across its energy operations while investing in skills training for Emirati talent.

The deals, announced on November 2 at the ENACT Majlis in Abu Dhabi, include a multi-year technology deployment with ADNOC Gas, collaboration on training programs through ADNOC Technical Academy, and a broader framework to explore robotics manufacturing and AI analytics across ADNOC’s asset base.

The first agreement, signed between Gecko Robotics and AIQ, ADNOC’s joint venture with Presight, marks AIQ’s entry into robotics. Under the deal, Gecko’s Cantilever operating system will be deployed across ADNOC Gas facilities to automate inspection and maintenance through real-time robotic data collection and analytics.

A second agreement will see ADNOC and Gecko explore the wider rollout of advanced robotics and AI-powered analytics across the company’s upstream and downstream assets. The collaboration also includes evaluating local manufacturing opportunities for Gecko’s robotic systems in the UAE, reinforcing ADNOC’s strategy to localize high-tech production and expand the nation’s industrial capabilities.

The third deal, between Gecko Robotics and ADNOC Technical Academy (ATA), focuses on training UAE Nationals in robotics operations, data analysis, and maintenance - part of ADNOC’s broader push to equip its workforce with next-generation technology skills.

Dr. Sultan Ahmed Al Jaber, ADNOC’s Managing Director and Group CEO, said the agreements represent “another step on our journey to becoming the world’s most AI-enabled energy company,” adding that the deployment of robotics and AI is key to “driving greater efficiency, safety, and performance” across ADNOC’s operations.

Gecko Robotics CEO Jake Loosararian praised ADNOC’s leadership in digital transformation, saying, “The energy companies that win won’t just utilize technology, they will become technology companies. There is only one way to win this race—and that’s to acquire physical data using robotics and unlock human and machine performance from the AI that data fuels.”

The partnerships come as ADNOC accelerates its “Energy AI” strategy, part of its broader effort to digitize operations and reduce downtime through predictive maintenance and automation. AIQ has been central to this initiative, developing AI-driven solutions for optimizing production, emissions monitoring, and asset management.

This latest move positions ADNOC at the forefront of the Middle East’s growing robotics and AI landscape, reflecting both its global technology ambitions and commitment to developing local expertise.

By Charles Kennedy for Oilprice.com

Big Oil Is Suffering Despite the AI Energy Boom

By Haley Zaremba - Nov 01, 2025

• Artificial intelligence is fueling unprecedented investment in clean and emerging energy technologies, reshaping global energy priorities.
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• Despite growing energy demand, oil producers face weak prices and record oversupply as investor interest shifts elsewhere.
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• Tech billionaires and venture capitalists are betting big on geothermal and nuclear fusion, leaving traditional fossil fuel giants behind.
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AI seems to be the tide that raises all energy boats. Policymakers and private enterprises around the world are adopting an all-of-the-above approach to energy sourcing – clean energy pledges be damned – in order to shore up energy security in an era of unprecedented flux. Governments around the world are greenlighting new projects to boost energy production as fast as they can in an attempt to stay one step ahead of looming energy shortages, while tech moguls bet big on proven as well as unproven energy technologies. But while the AI boom is boosting investments for energy sources from geothermal to nuclear fusion, the world’s biggest energy source is missing out on the influx of cash that seems to be flowing into every other sector. 

Or rather, the amount of AI-inspired dollars flowing into Big Oil’s coffers simply isn’t enough to offset the considerable headwinds faced by the sector today. Despite a rabidly supportive policy environment in the United States and ever-increasing sanctions on Russia, The Economist reports that “times are surprisingly tough for the industry.” Even with ballooning energy demand projections, oil demand has remained soft, and global oil producers are steadily building up a serious oil glut with no signs of relief.

Earlier this month, the International Energy Agency raised its estimate for next year's oil glut, predicting a record oversupply for 2026. According to the agency’s official estimates, global oil supply will exceed demand by nearly 4 million barrels a day, potentially breaking the record for the biggest supply glut in history in annual terms.

Oil companies have been underperforming since before this increased projection hit the markets. “Since the start of last year the S&P 500 index of large American companies has produced a total return, including dividends, of 46%,” reports The Economist. “By contrast, American pedlars [sic] of oil and gas, including giants such as Chevron and Exxon, have returned just 14%.” 

Meanwhile, seemingly every other energy sector is going gangbusters. Money is pouring into nuclear energy startups at such a rapid clip that there are rumblings of a bubble. Last year, private equity and venture capital investments in advanced nuclear companies hit an all-time high, “surpass[ing] the total deal value of the past 15 years combined” according to S&P Global.

Even nuclear fusion, which does not yet exist in any commercially viable form, is receiving a windfall of research and development dollars, riding on the back of the AI boom. Sam Altman, the founder of OpenAI – the firm behind ChatGPT – and arguably the number one poster child of the AI sector, is also one of the world’s biggest proponents of and investors in nuclear fusion technology. He has personally poured hundreds of millions of dollars into nuclear fusion startups and headed one of the world’s buzziest potential fusion unicorns, Oklo. in part thanks to his high-profile confidence in the technology’s singular ability to meet AI’s future energy needs, a report by E.U. firm Fusion for Energy finds that the sector’s total funding has skyrocketed from US $1.7 billion in 2020 to US $15 billion as of September 2025.

At the same time, the geothermal energy market is emerging from niche status into mainstream energy investment portfolios. In 2023, the global market for geothermal energy was valued at USD 7.4 billion. It’s projected to reach a whopping USD 12.51 billion by 2032. The investment dollars are piling up as Big Tech gets bullish on the baseload clean energy. Meta and Alphabet (the companies behind Facebook and Google) are listed among the growing number of Silicon Valley firms partnering with geothermal startups. Earlier this year, Cindy Taff, chief executive of geothermal company Sage Geosystems, told The Hill that “It’s going to be the decade of geothermal.” 

But while even the most fringe and emergent forms of energy are soaring to new heights from the AI boom, Big Oil is struggling to benefit from the windfall. Even as Wood Mackenzie pushes back peak oil projections to 2032, supermajors are resorting to layoffs and handing out dividends instead of reinvesting in expansion in what The Economist calls “a sure sign that Western oilmen are feeling downcast about their industry’s growth prospects.”

By Haley Zaremba for Oilprice.com