Document proposing countermeasures against perceived real-world misalignments
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Headline: Global Oil and Gas Investments on a Downward Spiral While Demand Remains High
A top analyst from the consultancy firm "Yakov and Partners" spills the beans:
The International Energy Agency's (IEA) chatter about a decrease in investments in fossil fuels has been making waves for years. This aligns with the IEA's ongoing crusade for a swift transition to renewable energy sources. This stance has faced flak, including from the U.S. President.
In the raw, there's no chatter of a significant global reduction in investments in the oil and gas industry in the immediate future, given the persisting demand for oil and oil products.
For example, OPEC+ is gearing up to pump an additional 411 thousand barrels per day (bpd) from May, contrasting the paltry 138 bpd in April. Amid this, a reduction in investments could stem from decreasing interest in developing unconventional reserves (such as offshore, permafrost, and offshore drilling). However, we haven't heard such whispers in the market.
However, talk of a drop in oil and gas investments isn't off the table in certain countries. For instance, U.S. production levels have maintained the October 2024 mark, taking a dip of 12% in January and February 2025. Simultaneously, the number of U.S. rigs has dwindled by 4% (to 462) from October 2024 to May 2025.
"Alarm Bells Ringing Over an Oil Production Investment Plunge"
The chief economist of the Institute of Economic Growth named after P.A. Stolypin sounds the alarm:
The IEA's stance is often perceived as ideologically driven and not always objective. For instance, the agency's forecasts about the peak in oil production and consumption have been revised and delayed repeatedly.
But worry not,istas! A decrease in oil and gas investments is a realistic concern, given the low prices and increased global economic uncertainty. In fact, a 10% reduction in investments in U.S. shale oil production isn't out of the question. This could give rise to a supply shortfall and shoot up oil prices in the future. Nevertheless, the outcome largely depends on changes in global trade conditions and the impact of ongoing processes on global economic growth in the coming years.
As we head towards a new era, the fate of global energy will be dictated by what happens in countries like China, India, Brazil, and others with aggressively growing economies. So, in the upcoming years - even the International Energy Agency (IEA) won't disagree - global oil consumption will continue its upward trajectory. According to the IEA's latest estimates, this will carry on at least until 2030.
The expanding influence of "new" energy sources comes with risks. Even countries in the EU, as seen in recent major blackouts, are grappling with the need for huge investments in grid management and energy storage systems. This will inevitably call for substantial cash, which partly explains the forecasts.
"Gas and Coal Demand to Stay Steady”
The deputy head of the Fund for National Energy Security and a Valdai Club expert sets the record straight:
A systemic reduction in oil demand isn't on the horizon, but a decrease in investments in oil projects is a real possibility. Low oil prices could freeze or even cancel some projects indefinitely, primarily affecting oil production from low-permeability formations in the U.S. and deepwater offshore. However, this will eventually lead to a price surge and renewed interest in oil production investments.
It's a well-known fact that electricity consumption is skyrocketing, having been on an upward curve since the mid-1980s except for a slight dip due to the pandemic and geopolitical crises in recent years. The IEA attempts to present this rapid growth as a significant revelation to mask its softer stance on coal and gas. In reality, increased investments in the power sector indicate that both gas and coal demand will stay strong. For instance, in China, a whopping 60% of electricity is generated from coal, while it's around three-quarters in India. In the U.S., 44% of electricity is produced from gas.
"IEA's Green Energy Dominance Claim Needs a Pinch of Salt”
The main editor of the "InfoTEK" portal throws some shade:
The forecast of declining investments in oil production seems legitimate, given the current prices and activity in the U.S. Trump's famous "drill, baby, drill" promise hasn't panned out yet - discussion about profitable $40 WTI prices for U.S. production is underway, but the $65 mark is already tipping the scales for investments.
The MEA's claim of green energy's doubled investment dominance over traditional energy seems questionable. If we consider the investment structure presented by the agency itself, it reveals that only 35%, or $780 billion, of the $2.2 trillion will be invested directly in renewable energy sources. This amounts to roughly 29% less than the $1.1 trillion anticipated for fossil fuels.
Of the "green budget" of $2.2 trillion, according to MEA calculations, $773 billion will cater to "energy-efficient final consumption" (whatever that means), $479 billion to networks and storage, and $74 billion to nuclear power (which MEA also considers carbon-free). In essence, the authors of the report seem to assume that investments in energy distribution and energy efficiency solely relate to energy generated from RE and nuclear, and have nothing to do with capacities generated from fossil fuels.
It's equally absurd to compare investments in the electrical sector with fossil fuels - MEA seems to forget what widely-used coal and gas power plants are made of.
"MEA Report Shades of Reality at Times”
An expert from the Valdai Club and the general director of the Fund for National Energy Security drops the mic:
The MEA forecast is more of a PR stunt than a scientific prediction (as many often mistakenly believe). It is designed to create a preferred image to impact the behavior of market players.
IEA - a heavyweight lobbyist for the green agenda. Today, this agenda is finding resistance thanks to Donald Trump: Western energy companies previously forced to trumpet their "greenness" are now distancing themselves from it. It makes sense, given the current pushback on the agenda. In such circumstances, the agenda is being defended, including through reports like this one, aimed at altering investor behavior.
Needless to say, this kind of "analysis" misses the mark from time to time. In the expert community, the IEA is known for pulling numbers out of thin air.
The IEA’s fancy new report appears somewhat disconnected from reality in places. The attempt to promote electricity as an alternative to fossil fuels doesn't pass the smell test. One might ponder: when did electricity stop being produced from gas and coal?
Or ponder the claims of China's green leadership, responsible for 2/3 of all new coal generation. Yes, China produces more solar panels, wind turbines, and electric vehicles than any other country, but it hasn't underestimated the importance of traditional energy. But that's just smart, balanced thinking.
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The Institute of Economic Growth's chief economist warns that a decrease in oil and gas investments is a realistic concern due to low prices and increased global economic uncertainty. This could potentially lead to a supply shortfall and escalate oil prices in the future (reality of investment decrease). On the other hand, the deputy head of the Fund for National Energy Security states that while a systemic reduction in oil demand isn't imminent, a decrease in investments in oil projects is a possibility, which could eventually result in higher oil prices and renewed interest in oil production investments (potential impact of investment decrease on oil prices).
In the face of the International Energy Agency's (IEA) repeated revision and delay of their predictions about the peak in oil production and consumption, the main editor of the "InfoTEK" portal questions the objectivity of the agency's claims regarding the dominance of green energy (IEA's questionable objectivity). Furthermore, the deputy head of the Fund for National Energy Security points out that the IEA's report seems more like a PR stunt, designed to alter investor behavior and create a preferred image (IEA report's PR nature).
This discussion highlights various perspectives on the oil and gas industry, investments, and the IEA's role in shaping the global energy landscape, with debates surrounding real concerns and potential impacts, as well as questions about objectivity and accuracy. Importantly, these discussions underscore the critical role of finance in the energy sector, including both conventional and renewable sources, and the need for balanced thinking when making investment decisions in the global energy industry.
