Global oil demand is expected to reach its peak by 2030 after rebounding to pre-pandemic levels in 2023. This anticipated slowdown in demand will be driven by advancements in energy efficiency and the rapid adoption of electric vehicles (EVs). However, certain sectors, including airlines and chemicals, will continue to rely on oil due to the absence of viable alternatives. Additionally, emerging economies, where transitioning to cleaner energy sources is prohibitively expensive, will likely maintain their dependence on fossil fuels for an extended period.

The ongoing energy crisis in Europe has catalyzed a surge in clean energy investments. In the United States, the Inflation Reduction Act is propelling funding into renewable energy and electric mobility, complemented by various initiatives across Europe, Japan, China, and beyond. Notably, 2023 marked a historic milestone, with solar energy investments reaching approximately USD 380 billion, surpassing the USD 370 billion invested in oil and gas.

Despite promising growth potential, the wind industry is grappling with significant hurdles. Supply chain disruptions, escalating material costs, and logistical challenges have resulted in project delays and increased expenses. Furthermore, financial instability among key industry players has intensified these issues, creating uncertainty around future investments. Some major wind turbine manufacturers have reported considerable losses, prompting a reassessment of project timelines and strategies. The sector is currently navigating a recovery phase.

Similarly, the solar industry is facing its own set of challenges. The solar photovoltaic (PV) sector is embroiled in a price war, fueled by overcapacity and fierce competition among Chinese manufacturers. This rivalry has led to a notable decline in solar panel prices, making solar energy more accessible but also tightening profit margins for producers. While this price reduction benefits consumers and accelerates the adoption of solar technology, it presents financial difficulties for manufacturers striving to maintain profitability amid rising production costs and ongoing supply chain disruptions.

In this context, integrated oil and gas companies achieved an impressive EBITDA margin nearing 30% in 2023, in stark contrast to the power sector, which reported a margin of 15%. Both sectors are poised for robust growth, with earnings per share projected to increase by double digits over the next five years.