NCEA Report Finds Partial Return to Realism in IEA’s World Energy Outlook 2025, but Warns Key Risks Remain

NCEA Report Finds Partial Return to Realism in IEA’s World Energy Outlook 2025, but Warns Key Risks Remain

January 28, 2026 — The National Center for Energy Analytics (NCEA) today released a new report, “The Return of Realism in Global Oil Forecasts,” offering a critique of the International Energy Agency’s World Energy Outlook 2025 (WEO 2025). The analysis concludes that while the IEA has taken meaningful steps toward restoring analytical credibility, important assumptions and risks remain insufficiently addressed.

After a five-year absence, the IEA’s reinstatement of its Current Policies Scenario (CPS) marks a significant shift in how global energy futures are modeled. Unlike recent editions that relied almost exclusively on aspirational policy pathways, WEO 2025 once again includes a baseline grounded in policies that are in operation. This change materially alters the outlook for global energy demand and oil consumption.

The report is written by Neil Atkinson, IEA’s former head of oil and visiting fellow at NCEA, and Adam Sieminski, senior adviser to the board of trustees of the King Abdullah Petroleum Studies and Research Center (KAPSARC) and former administrator of the U.S. Energy Information Administration (EIA) under President Barack Obama.

“In recent years, the IEA’s focus on the aspirations that are inherent in many national energy policies—rather than on including realities—paints a picture of possible futures that are self-evidently unrealistic and can thus mislead policymakers and investors who view the World Energy Outlook as an important contribution to planning. World Energy Outlook 2025 marks a significant yet incomplete return to analytical realism,” Atkinson and Sieminski wrote in their report.

Under the restored CPS, global oil demand continues to rise through 2050, with no projected peak. Even under the IEA’s Stated Policies Scenario (STEPS), oil demand peaks later and at higher levels than forecast in WEO 2024. NCEA finds that these revisions align more closely with observed trends, including population growth, rising incomes in developing economies, continued industrialization, and expanding electricity and data infrastructure.

Despite this recalibration, the report highlights four critical areas where WEO 2025 continues to fall short.

• While the IEA acknowledges higher overall energy demand, it still underestimates the durability of fossil fuel use across multiple sectors.
• Emissions pathways remain anchored to assumptions about policy implementation that are increasingly disconnected from political and economic realities, particularly among major economies that collectively represent the majority of global GDP.
• The WEO 2025 does not adequately model constraints related to critical minerals and energy security. Export controls, supply concentration, declining ore grades, infrastructure bottlenecks, and geopolitical risks pose material challenges to large-scale deployment of energy transition technologies, yet these factors remain insufficiently reflected in demand forecasts.
• NCEA warns that years of messaging around imminent peak oil demand and calls to curtail upstream investment have contributed to today’s fragile supply outlook. WEO 2025 now acknowledges that sustained underinvestment could lead to supply shortfalls, price volatility, and increased geopolitical dependence. Under realistic demand scenarios, the report estimates that hundreds of billions of dollars in additional oil and gas investment will be required over the coming decade to avoid destabilizing market imbalances.

As a recommendation, the authors urge policymakers and investors treat the restored CPS as a central planning reference and to rebalance energy strategies.

“The world will consume more energy, including more oil, for far longer than previously projected. This emphasizes the urgent need for policies that balance emissions reduction goals with affordability, security, and economic development—three factors that are vital for global prosperity and stability,” they wrote.

Atkinson and Sieminski presented their findings on January 27, 2026 at the NCEA’s energy briefing series. To watch the recording of the event, visit https://energyanalytics.org/energy-delusions/.