Global oil and gas demand projected to decline amidst energy security shift

Scenario assumes 15% to 20% disruption of global oil and LNG supply.

Middle East disruption could accelerate a shift away from oil and gas-centred energy systems towards more domestic, electrified, and diversified national systems, cutting global oil demand by 20% and gas demand by 10% by 2050, according to a Wood Mackenzie report.

The scenario assumes a major geopolitical escalation from early 2026 that disrupts 15% to 20% of global oil and LNG supply.

Oil demand falls by 9% in the near term due to supply outages before returning to pre-crisis levels by 2030.

After 2030, energy systems shift as countries reduce reliance on imported fuels, and oil and gas demand declines. Electrification and efficiency expand across transport, buildings, and industry.

Total power demand remains broadly stable as lower hydrogen-related demand offsets wider electrification, the report said.

Renewable-based power systems expand and form the core of domestic electricity supply, whilst nuclear-based systems increase by 40% versus the base case, with capacity additions from the 2030s providing stable baseload power.

Coal use rises in the near term as countries rely on domestic fuel and delay retirements. By 2050, coal demand is 20% higher than the base case.

Gas-fired power is scaled back as governments prioritise secure and domestically available sources.

Hydrogen and carbon capture deployment declines due to cost, efficiency, and security considerations.

By 2050, oil demand falls by 20% and gas demand falls by 10% versus the base case as energy systems become more local, diversified, and less reliant on international fuel trade, the report added.