As December rolls into January, the prediction-industrial complex has moved into high gear, churning out more forecasts for the year ahead than a normal human can comprehend.

In the interest of brevity and time, Hart Energy has sifted through the jumble of forecasts to pick out the less interesting predictions.

The 30-second summary of the forecasts for 2025 is this: Energy prices are more likely to fall than rise; renewables will keep growing; gasoline consumption may peak; LNG and carbon capture could have their big moment; and AI and EVs are going to use even more electricity.

One prediction we feel confident about: Come December, we’ll get more predictions.

Here's what analysts are seeing in store for the energy sector in 2025:

Supply headwinds

The arrival of the second Trump administration and its favorable oil and gas policies might mean sunny horizons for drillers. But not so fast for proponents of the ‘drill, baby, drill’ slogan. A potential oversupply of oil may be looming, according to Rystad Energy’s Matthew Bernstein, senior analyst for upstream.

Headwinds for crude oil are expected in the new year on a higher stock market in the U.S., more OPEC cuts and economic recovery in China, Bloomberg Intelligence’s Mike McGlone, senior commodity strategist, said in an analyst report. And, non-OPEC production growth is expected to be greater than total global oil demand growth, said S&P Global Commodity Insights, making it a tough year for the organization to increase supply without weighing on prices.

Rystad Energy is predicting a 2% decline in global upstream investments by next year, signaling a plateau following the previous decade’s robust growth, said Aditya Saraswat, the firm's research director, for Middle East and North Africa. “Rystad Energy forecasts a decline of around 8% in shale/tight oil investments in 2025 due to a combination of lower activity and reduced unit prices,” Saraswat said.

Electric vehicle sales are also beginning to pick up speed, leading to a decline in global diesel and gasoline demand and lower crude prices, analysts said.

“Declining demand for diesel in the U.S., China, Europe and India, along with increasing supply excesses in the Americas and rising OPEC spare capacity, point to lower crude oil prices in 2025,” said Bloomberg Intelligence’s McGlone.

“China’s oil demand for passenger vehicles will begin to decline in 2025,” according to S&P Global. “At the same time, China’s EV exports are helping countries electrify transport, particularly countries that are net oil importers, have no sizable domestic vehicle brands and have a general favorable public opinion of China.”

As for natural gas, low natural gas prices continue to discourage new production while incentivizing new demand in 2025, according to credit rating agency Morningstar DBRS.

“Gas storage inventories remain above normal for this time of year and continue to weigh on the gas price. However, an impending increase in U.S. and Canadian LNG exports should help to further reduce North American inventory. For 2025, we forecast an average Nymex price of $3.25/mcf,” Morningstar DBRS said.

In 2025, new liquefaction capacity in North America will significantly bump up the amount of LNG shipped globally, S&P Global said.

“Of the 27 million metric tons of new supply expected in 2025, nearly 90% is expected from North America,” S&P Global said.  

Growing demand

Energy demand is expected to continue to rise as AI and data centers continue to guzzle up energy. Power demand for data centers will grow 10% to 15% per year through 2030, according to S&P Global.

Data center energy consumption could increase nearly threefold to 74 gigawatts (GW) to 132 GW annually by 2028, potentially accounting for up to 12% of the nation's electricity use, compared to just over 4% today, according to the Lawrence Berkeley National Laboratory.

And by 2030, data centers could account for up to 5% of total global power demand, S&P said.

In 2025 alone, demand for fossil fuels is expected to increase by more than 3 MMboe/d, S&P Global said. The associated CO2 emissions will reach record highs, S&P said, “although it will be the smallest increase since the pandemic.”

“While the supply of clean energy is growing faster than it ever has in history (over 5 million boe/d), it is not yet fast enough to curtail the growth in fossil fuel demand, let alone displace existing fossil fuel consumption,” S&P said.

Tech companies have begun to stake claims in the power purchase market to secure enough power for their operations, said Carlos Torres Diaz, head of power markets research for Rystad.

“To meet round-the-clock power needs, some technology players have been turning to additional baseload sources, including signed agreements to purchase power from conventional nuclear power plants,” Diaz said. “Interest is also being shown in new small modular reactor technologies.”

What’s next for clean energy?

Clean energy endeavors are expected to continue to pick up speed.

Energy storage capabilities are expected to grow, particularly in the grid-scale and residential segments, said Wood Mackenzie’s Nina Rangel, senior research analyst, power and renewables.

In the next three years, grid-scale installations are expected to hit a cumulative volume of 63.7 GW and residential storage to grow by 10 GW.

Carbon capture is also expected to grow rapidly in 2025 following a wave of projects making final investment decisions, said Rystad Energy’s Yvonne Lam. Policy decisions will have a big hand in its momentum, she said.

“This momentum stems from supportive policies and funding in Europe, increasing carbon dioxide removal credit activity, and post-U.S. election market clarity. Key challenges remain, including a gap between CO₂ capture demand and infrastructure readiness, which could delay projects,” Lam said.

Hydrogen's prospects are not looking as good.

“The hydrogen sector is bracing for a downturn,” said Minh Khoi Le, Rystad's head of hydrogen research. “While some key FIDs were made in 2024, project cancellations have also been on the rise. Key auctions in Europe and Japan will support the progress of selected projects in 2025, but others will continue to face challenges and cancellations.

The incoming Trump administration in the U.S. and elections in Germany—two major hydrogen markets—may bring about clarity on political support and governmental commitment to hydrogen, Khoi Le said.

Policy developments under Trump may lean more towards blue hydrogen, in which a surge in blue hydrogen investment—with at least three large-scale blue hydrogen projects reaching FID—will see the U.S. emerge as the world's leading blue hydrogen producer,” according to Wood Mackenzie's Bridget van Dorsten, principal analyst, hydrogen and derivatives research.

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