IEA Reports Global Fossil Fuel Investment Expected to Fall in 2025

Global fossil fuel investments, particularly in oil, are projected to decline in 2025 for the first time in over a decade, excluding the pandemic period, according to the International Energy Agency (IEA). The IEA forecasts a 6% drop in oil investments, driven by economic uncertainties, lower demand expectations, declining crude prices, and a significant reduction in spending on U.S. tight oil. Crude prices have been pressured by global trade tensions, including tariff policies under U.S. President Donald Trump, and increased production from OPEC+, contributing to an oversupplied market. Overall upstream oil and gas investment is expected to fall about 4%, with refinery investment reaching its lowest level in a decade. Despite declines in oil investment, spending on natural gas fields is expected to remain stable, with strong growth in new liquefied natural gas projects globally. These trends reflect a cautious industry outlook amid shifting market dynamics and ongoing energy transition efforts.