Oil Majors Rethink Their Renewable Energy Ambitions
One of the key trends in oil major strategies this year has been the notable divestment of renewable projects, at times even reversing climate commitments amidst shaky non-fossil energy economics.
– UK major BP which previously had committed to a 20-fold growth in renewable power buildout to 50GW, spun out its offshore wind projects into a JV with Japan’s JERA whilst Shell stopped new investments into wind.
– The return of Donald Trump to the Oval Office in January will most probably mark another milestone in oil majors downgrading their renewable targets, particularly as Trump vowed to pull the US out of the 2015 Paris Agreement.
– Oil companies maintained their focus on shareholder returns this year and their higher borrowing in 2024-2025 dictates that they cut low-margin liabilities to the benefit of high-yield oil and gas projects.
Outpacing China, India Will Become Oil Bulls’ Favourite Country
India has overtaken China in terms of its oil demand growth rate, a trend that is expected to deepen in 2025 as the South Asian country accelerates its refinery expansion plans and benefits from a much higher economic growth rate.
– India’s 2025 demand growth rate of 3.2% will be notably higher than China’s assumed 1.7% with almost no downside foreseeable, further boosted by the addition of the 300,000 b/d Barmer refinery in Rajasthan.