Industry

Rystad predicts energy sector volatility in 2025. (Image source: Adobe Stock)

The coming year looks set to bring more volatility, geopolitical tension and policy evolutions in terms of the energy scene, according to new research from Rystad Energy, which has highlighted significant trends that will shape the energy world in 2025

The US-China dynamic, ongoing conflicts in the Middle East and the war in Ukraine will take centre stage, while rising instability across the Global South, and the transformative impact of AI will also shape the global order. A global trade war sparked by US tariffs, and China economic slowdown are potential clouds on the horizon.

In terms of global upstream investments, Rystad forecasts a decline of 2% in 2025, with deepwater developments in Surname, Mexico and Turkiye and offshore shelf investments in Suriname Indonesia, Qatar and Russia offset by a decline in shale/tight oil investments. Despite Donald Trump’s “drill baby drill” rhetoric, US operators are less likely than ever to spend more on drilling in the face of an oversupplied market. A forecast growth in both OPEC+ and non-OPEC+ supply is set to put a downward pressure on oil prices.

“Leading into 2025, the OPEC+ balancing act will make or break oil prices, seeking to manage its market share expectations alongside non-OPEC+ growth and slowing demand,” said Aditya Saraswat, senior vice president, Upstream Research at Rystad.

Rystad also highlights ongoing supply chain issues, with geopolitical tensions and increased protectionism likely to impact the global supply chain supporting the energy transition. Within offshore oil and gas, bottlenecks around floating production, storage and offloading vessels (FPSOs), subsea kits, drilling rigs and other vessels will continue to inflate and delay capital projects. Overall, increased divestments, mergers and acquisitions are likely across the energy supply chain.

Global power demand is entering a period of accelerated growth, fuelled by industrial decarbonisation efforts, the rise of EVs and the rapid expansion of data centres, with global electricity demand from data centres set to more than double by the end of the decade.

Low carbon energy markets are set to grow, boosted by climate plans emerging from the COP29 summit.

“However, However, 2025 could be another reality check for renewables and cleantech, with shifting policies favouring fossil fuels, green energy stocks under pressure, and uncertainty about funding and subsidies,” commented Artem Abramov, head of Clean Tech Research at Rystad Energy.

Nevertheless Solar PV is set to grow by around 600TWh in 2025, and the CCUS market is poised for rapid growth, thanks to policy support, despite infrastructure hurdles.

The hydrogen sector is however facing a reality check with challenges and cancellations on the cards.

“We expect a more pragmatic approach in the clean hydrogen sector, as the cost premium for renewable hydrogen and derivatives remains largely unchanged. Additionally, 2025 will see continued progress from China and India, as they advance their clean hydrogen and derivatives agendas,” said Minh Khoi Le, head of Hydrogen Research at Rystad.

“We’re moving from a time of energy scarcity to a time of energy abundance,” says Rystad Energy CEO and founder Jarand Rystad. “Capacity additions in both fossil fuels and renewables will outpace increases in demand next year. Similarly, in the face of an oversupplied oil market, OPEC+ may need to extend its production cuts far into 2025 to protect oil prices. The era of China driving oil consumption growth is over, with the country’s peak diesel in the rearview mirror, gasoline demand plateauing and coal consumption levelling off, as it is globally.

“This is echoed in the electricity market, with 90% of the power consumption growth in 2025 coming from renewables, while nuclear and gas share the remaining 10%. The intermittency of renewable power capacity has triggered record periods of negative prices, intensifying the need for reliable energy storage. As such, 2025 could be a breakout year for energy storage systems. Of the expected 1,350 terawatt hours (TWh) of growth in global power demand, consumption by data centres – primarily fuelled by AI – is likely to grow by 13% in 2025. This equals about 3% of total electricity consumption growth, similar to the growth from the 20 million new electric vehicles (EVs) expected.

“The new Trump administration will impact domestic and global energy priorities, including pulling any levers available to increase domestic crude production, even though the industry is unlikely to respond to this stimulus.

"However, President Trump might have more success in accelerating liquefied natural gas (LNG) infrastructure investments, the results of which will not be felt for several years. These dynamics underscore the importance of careful navigation as the sector balances short-term challenges with long-term opportunities.”

The service centre will provide 24-hour engineering services for pumps and rotating equipment. (Image source: Sulzer)

Sulzer has opened a new service centre in Kuwait, to provide 24-hour engineering services for all brands of pumps and rotating equipment

The service centre at Al Ahmadi supports over 1,500 Sulzer pumps already installed in local plants across Kuwait, as well as servicing pumps from other brands. It is the first time an original equipment manufacturer (OEM) offers such comprehensive services in the region, according to the company, with customers set to benefit from fast turnaround times and higher operational productivity.

Sulzer leverages the strategic location and resources of Khuff General Trading & Contracting Company’s Al Ahmadi Service Center to ensure round-the-clock service availability for customers in the region and comprehensive support across their entire equipment range. Services at the new facility include standard part and component repairs, reverse engineering, strip-down and inspection services, advanced diagnostics and cutting-edge technologies for multiple pump brands, as well as services for rotating equipment such as gas and steam turbines, compressors and motors.

Sulzer’s services division president Ravin Pillay-Ramsamy said, “This service expansion demonstrates our ongoing commitment to customers and partners in the region. With innovative solutions and expert support tailored to their unique challenges, we optimise their operations holistically and create added value by resolving issues across their entire equipment portfolio. We're proud to offer broad technical capabilities at our Kuwait Service Center.”

David Martin, head of sales at Sulzer Middle East, added, “Our new facility ensures closer collaboration, faster repairs and retrofits, and fewer unplanned downtimes for operators. Keeping downtime to a minimum will help ensure reduced operational costs, allowing our customers to stay ahead of the competition.”

The phase out of cuts shift from 12 months to 18 months. (Image source: Rystad Energy)

OPEC+ members have extended the voluntary adjustments of 1.65 million bpd announced in April 2023 until the end of December 2026

The organisation has extended the additional voluntary adjustments of 2.2 million bpd announced in November 2023 until the end of March 2025, delaying the phase out from September  2025 to September 2026.
New compensation schedules for overproducing countries will be submitted by the end of December 2024. 

“Oil markets have been anxiously awaiting this OPEC+ meeting since the US election results made clear a Trump 2.0 presidency was on the horizon. Trump’s tariff-forward stance toward China and persisting weak demand provided the group with all of the encouragement needed to extend production cuts until the first quarter of 2025. The overall signal to the market is constructive and will likely prevent any price downsides in the short term. The announcement makes crystal clear that the group is worried about both a potential supply glut and a lack of compliance with production targets among member countries,” said Mukesh Sahdev, global head of commodity markets, Rystad Energy.

The latest OPEC+ announcement hints that compliance among members is a concern, Rystad says. The organisation, however, has maintained that monthly changes can be paused or reversed at any time.

With the latest announcement, the production profile and oil balances clearly indicate an acknowledgment of the emerging supply glut without the extension in 2025.

The phase out of cuts shift from 12 months to 18 months is constructive for the crude balances for 2025, with a swing from average 0.7 million bpd surplus to average 0.3 million bpd deficit.

The confirmation that the UAE’s new baseline (300,000 bpd higher) will only start in April 2025 and will be gradually phased in over an 18-month period establishes the country's firm commitment towards OPEC+, Rystad says.

Rystad believes that the non-OPEC+ supply has not posed much of a concern for OPEC+.

The new business unit will leverage NMDC Group’s experiences and capabilities in the logistics and technical services sector. (Image source: NMDC Group)

NMDC Group (ADX: NMDC), the Abu Dhabi based EPC focusing on the dredging, marine and energy sectors, is broadening its offering with the establishment of a new business unit, NMDC LTS, which will focus on logistics and technical services

Building on NMDC Group’s experiences and capabilities in the logistics and technical services sector, NMDC LTS will own and/or operate NMDC Group’s significant resource pool of marine support craft, technical capabilities, plant and equipment to expand its services to the wider construction and industrial sectors.

Eng. Yasser Zaghloul, CEO of NMDC Group, said, “NMDC LTS will be a trusted platform that gives new partners access to one of the biggest construction logistics and technical services operators in the region and enable them to gain the benefits of efficiency, innovation, and service focused delivery that NMDC Group has built over the decades of success. We look forward to continuing to work with our current partners in this exciting next phase of NMDC Group’s growth, and to take our expertise and offering to new clients and markets.”

Peter Marvin, chief technical & resources officer of NMDC LTS added, “The delivery of EPC projects in the marine sector has unique challenges, requiring innovative solutions to enable the logistics and technical support necessary to build the infrastructure that our customers and partners need for their sustainable growth. Over decades NMDC Group has consistently proven its expertise, capability and capacity in this field delivering maritime and energy infrastructure around the world. NMDC LTS will take these strengths and expand its application to new customers, partners and industrial sectors through value-added collaboration and seeking to translate our extensive capabilities to meet their needs beyond the delivery of infrastructure. NMDC LTS is uniquely positioned to maximise the potential of this diversification into the logistics and technical services sectors.“
NMDC Group’s other business units are NMDC Dredging & Marine, NMDC Energy, NMDC Engineering and NMDC Construction.