The IEA’s abrupt shift this week, conceding that fossil fuels will remain central to the global energy system, marks a moment of vindication for OPEC. For years, producers such as Algeria have argued that the world was nowhere near a genuine fossil-fuel plateau. The numbers bear this out: roughly 80% of global energy still comes from oil, gas, and even coal, while shortages of gas turbines highlight continued dependence on natural gas for electricity. The problem hasn’t been demand, but rather under investment. Years of discouraged financing, especially in Europe, have constrained the ability of oil and gas producers to scale. Renewables can’t replace hydrocarbons in fertilizers, manufacturing, or heavy transport. Trump’s policy reset only accelerated the correction of unrealistic models, but the underlying reality was always there.
A tighter market ahead, and a shifting global map
OPEC+ has opted for a January pause in production increases, and the duration of that pause will hinge entirely on market response. Oil demand remains soft, while winter is lifting gas consumption. US newly imposed tariffs on India, reportedly up to 50%, combined with Western sanctions on Russian suppliers, are tightening balances and potentially reshaping market share. With Russian crude selling at a $20 discount yet facing mounting barriers, Gulf producers such as Iraq, Saudi Arabia, and the UAE may regain ground in India, where Russia’s share jumped from 2% in 2021 to 34% today.