In an era where headlines often trumpet the impending demise of fossil fuels, the reality on the ground tells a different story. Global oil consumption shattered records in 2024, climbing to 101.8 million barrels per day (bpd), a 0.7% increase from the previous year and marking an all-time high.
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This surge, primarily driven by non-OECD countries such as India, underscores that peak oil demand remains a distant prospect. While China’s oil use decreased slightly by 1.2% amid economic slowdowns and transportation electrification, overall global demand has grown at an average annual rate of 1% over the past decade.
Far from fading, oil’s dominance persists, challenging narratives of a swift transition away from hydrocarbons.Shifting Trends in Fossil Fuels: Natural Gas on the Rise, Oil Steady, Coal Resurgent
The energy landscape is evolving, but not in the way renewable advocates might hope. Natural gas demand is experiencing robust growth, increasing by 2.7% (or 115 billion cubic meters) in 2024, equivalent to about 4 exajoules.
Global oil consumption – Source Robert Rapier, Oil Price.com
Projections for 2025 indicate a moderation to below 2% growth due to tighter market conditions, yet overall consumption is expected to continue climbing, particularly in Asia, where economic expansion and emissions reduction efforts are fueling liquefied natural gas (LNG) demand by around 60% through 2040.
This uptick could pressure prices, with U.S. natural gas futures pointing to steeper rises in 2025 as production stabilizes around 116 billion cubic feet per day (Bcf/d).
Coal, often dismissed as a relic of the past, is also defying expectations with increased demand. Global coal consumption grew by 1.2% in 2024, reaching a record 8.77 billion tonnes, and is projected to remain at elevated levels through 2027, potentially even higher in 2025-2027 as power demand surges.
In the U.S., electric power sector coal use is forecasted to edge up by 0.4% to 371.7 million short tons in 2025, bolstering thermal coal markets. This resilience stems from coal’s role in meeting baseload power needs, especially in emerging economies where capacity has risen to 2,175 gigawatts (GW) since the 2015 Paris Agreement. Oil, while potentially facing slower growth in places like China, shows no signs of imminent decline. U.S. production growth slowed to 2% in 2024, but global reserves remain flat amid investment hesitancy, which could tighten supplies if demand holds steady.
Renewables’ Struggle to Displace Fossil Fuels
Despite record investments in clean energy—projected at $2.2 trillion in 2025, nearly double that of fossil fuels—renewables are failing to displace hydrocarbons in a meaningful way. In the U.S., studies indicate that expanding renewable energy sources does not necessarily lead to a reduction in fossil fuel use, as energy demand continues to grow and intermittency issues persist. Globally, while renewables are set to surpass coal as the leading energy source by 2025, fossil fuels continue to fill the gaps in rising demand, resulting in a 0.8% increase in CO2 emissions over recent years. The transition has stagnated over the past five years, with clean energy’s cost advantages offset by reliability challenges and opposition to infrastructure projects.
“We have never been in an energy transition; we have been in an expensive energy addition. – Stu Turley”
Even as wind and solar dominate new electricity generation, they are expected to comprise only about 50% of power by 2050 in most scenarios, leaving ample room for fossil fuels and nuclear energy.
AI’s Energy Appetite: Boosting Demand for Coal, Nuclear, and Natural Gas
Artificial intelligence is emerging as a key driver of energy demand, exacerbating reliance on fossil fuels and nuclear power. AI data centers are forecasted to spike electricity use, with growth potentially doubling power needs in some areas. This surge is likely to be met by natural gas plants for their quick scalability, alongside coal in regions like the U.S., where natural gas’ generation share dips to 40% in 2025 but overall consumption rises. Nuclear power is positioned as a low-carbon complement, with investments surging 50% to over $70 billion globally in 2025, though deployment timelines may lag behind AI’s rapid expansion.
Coal could see renewed demand as a baseload option if renewables and gas can’t keep pace.EVs Stalling in the U.S.: Has Market Penetration Peaked, and Are Hybrids the Real Gasoline Curber?
The electric vehicle (EV) revolution in the U.S. appears to have hit a wall. EV sales reached 1.6 million units in 2024, capturing over 10% market share, but growth has stalled in 2025 amid consumer rejection.
Only 34% of consumers plan to buy an EV in the next 24 months, down from 48% in 2023, due to high prices, limited range, charging woes, and elevated insurance/repair costs. Inventory ballooned to a 92-day supply in early 2025, nearly double that of gasoline vehicles, prompting manufacturers like Ford to pivot from EVs. This slowdown suggests EVs may have reached maximum penetration for now, with projections slashing 2030 sales share to 25% from earlier 50% estimates.
Instead, hybrids are surging, accounting for rising sales (e.g., 23% in luxury segments) and offering a pragmatic alternative.
Hybrids, which combine gas engines with electric efficiency, can curb gasoline demand more effectively in the short term by achieving broader adoption, potentially reducing fuel use faster than EVs alone, given current market resistance.
Tesla: Not Just an EV Maker—A Broader Investment Play
Tesla stands apart in the EV space, evolving into a multifaceted tech powerhouse. While EV deliveries dipped in Q2 2025 amid focus shifts, the company’s ventures into AI, robotics (e.g., the Optimus humanoid robot targeting 5,000 units), solar energy, and autonomous driving position it for long-term growth. Partnerships with xAI, Elon Musk’s AI startup, including potential Tesla investments, enhance its robotics and autonomy edge. Despite Q1 2025 margin pressures from AI spending, Tesla’s 30% EV gross margins and $60 billion cash reserves make it a compelling U.S. market investment, with analysts eyeing $2.5 trillion valuation potential from robotaxi and robotics. Profiting from High-Demand Energy Sectors: Where Investors Should LookWith global energy investment hitting $3.3 trillion in 2025, opportunities abound in fossil fuels, natural gas, coal, and nuclear—sectors receiving $1.1 trillion collectively.
Natural gas offers upside through LNG exporters and infrastructure firms, as demand grows amid AI and electrification.
Coal investments could target producers in Asia, where capacity expansions drive market value to $1,262.5 billion by 2025.
Nuclear, with $70 billion in spending, appeals via utilities and reactor developers, capitalizing on AI’s clean power needs.
Investing in oil and gas royalties or privately held drilling operations for tax-preferred investments.
Diversified energy ETFs or stocks in these areas provide exposure, though risks like policy shifts and price volatility warrant caution.
In conclusion, the energy world’s fossil fuel backbone remains robust, bolstered by emerging demands like AI and tempered EV enthusiasm. For investors and policymakers, adapting to these trends—rather than wishing them away—will be key to navigating the future. This article is just touching on the bigger issue, and that is the total bifurcation of the markets into those forcing Net Zero green energy policies and facing deindustrialization and financial collapse, vs. the countries going after a balanced approach supporting energy that can produce more energy than it costs to make. We are on the cusp of a global market shift, and how you invest could make a significant difference. Investors are seeking returns, and the “renewable” wind, solar, and hydrogen markets have not been able to deliver baseload power or returns to investors.
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