Executive viewpoint: Eye on 2025: Major trends that are shaping oil, gas and energy this year

BRENT POTTS, HEAD, GLOBAL MARKETING FOR OIL, GAS, AND ENERGY, SAP  

Questions loom large over the energy business, as we proceed through the early days of 2025. What will continued geopolitical instability do to commodity supply, demand and prices? To what extent will a second Trump presidency shift energy and climate policies and priorities in the United States, and how will developments in the U.S. impact carbon-reduction and renewable energy development efforts globally? How will energy companies adjust their postures and pursuits as they seek to balance today’s realities with tomorrow’s priorities? 

As elusive as answers to questions like these might seem amid so much uncertainty and flux, if you connect enough dots, energy industry trendlines for 2025 begin to emerge. Let’s go out on a tenuous limb and look at several trends that SAP’s oil, gas and energy team sees shaping the global energy business during 2025 (with the usual caveats that accompany predictions of this sort). 

A renewed emphasis on domestic oil and gas production in the U.S., balanced with a continued push to develop renewable energy sources. Another Trump administration means a greater focus on domestic exploration and production, solidifying the U.S. as a net oil and gas exporter amid record production levels. That, plus a quiet wind-down of production quotas within OPEC, applies downward pressure to energy prices in North America and globally.  

Meanwhile, global energy companies that have been particularly aggressive in decarbonizing their portfolios will pull back a bit in that effort, in order to rebalance their portfolios, recognizing they must balance longer-term carbon reduction goals with near-term energy market demands and realities related to security of energy supply. We’re also seeing a push to repeal or reduce tax credits and other incentives for electric vehicles (EVs); for example, perhaps with a shift in emphasis to longer-term renewable transportation options, such as hydrogen as a vehicle fuel. Meanwhile, unlike in the U.S. (and perhaps in response to what is happening there), policymakers in the European Union are more aggressively pursuing incentives and mandates to accelerate mainstream adoption of renewable fuels and EVs, building on existing programs.  

Shareholders, consumers and regulators drive energy companies to maintain focus on decarbonization. Even with the U.S. likely to double down on domestic oil and gas exploration and production in 2025, global pressure from sources, such as the recent agreement among climate policy negotiators to establish an international carbon credit trading program, prompts energy companies to approach all their activities and relationships through a carbon-reduction lens.  

Immediately upon taking office in January, U.S. President Donald Trump began the process of withdrawing the U.S. from the Paris Climate Agreement. However, per previous practice and stipulations of the treaty, it will take a full year for this withdrawal to take place. Therefore, the U.S. will not be out of the Paris Climate Agreement fully until January 2026. 

Nevertheless, we do expect hydrocarbon-focused companies to embed emissions and carbon-reduction KPIs into their management of the hydrocarbon molecule and in their decision-making across the business. As more extended producer responsibility (EPR) and greenhouse gas reporting regulations take hold in Europe (CBAM, the carbon border adjustment mechanism) and in the U.S. (California’s emission disclosure requirements, which apply to entire value chains), as consumers and shareholders continue their calls for energy companies to decarbonize, and as important as flexibility is in meeting energy demand, these companies realize they can’t afford to dial back their efforts on the carbon-reduction and renewable energy fronts. As a result, we’ll continue to see them diversify into new lower-carbon energy products, services and lines of business, such as carbon-capture, retail EV charging and repurposing of refineries into renewable energy production.  

A push by energy companies to capture efficiencies in their hydrocarbon businesses. Due to a greater emphasis on the oil and gas portfolio, energy companies will prioritize finding new ways to run their hydrocarbon businesses more efficiently and profitably. To those ends, expect to hear more about companies moving away from expensive, customized digital infrastructure to embrace industry-standard, digital IT infrastructure, based on a realization that they can save substantial costs — up to tens of millions of dollars annually — by adopting simplified market-standard digital practices and processes rather than repeatedly trying to reinvent the wheel by developing proprietary software that requires expensive, difficult-to-maintain custom code.   

Rather than invest substantial IT resources in custom digital systems that do little to strategically differentiate them, energy companies will work together to develop market-standard solutions to manage non-differentiating workflows and processes in areas like finance, accounting, logistics and HR. That will free them to focus on activities and workflows that do move the needle competitively. Companies like Shell and Halliburton already are embracing this approach. 

Artificial intelligence, of course. The aforementioned fit-to-standard approach is part of a broader push that we’ll likely see intensify in 2025 toward integrated digital environments with embedded business AI that enable energy companies to better manage and understand their data, in order to respond rapidly to shifting market conditions and to nimbly pursue opportunities in new and existing markets. We see AI cementing its role as a go-to tool for energy companies in 2025, enabling them to improve in an area where they are already adept: managing the hydrocarbon molecule. In particular, we see generative AI-driven copilots and agents helping companies in areas like commodity trading and risk management.  

Prioritizing partnerships and collaborations. Earlier, I referenced a collaborative effort among energy companies to develop market-standard IT solutions that multiple companies can integrate into non-differentiating aspects of their operations. That’s one example of a new open-mindedness among energy companies to build or participate in cooperative initiatives and in broad, multi-industry ecosystems, in order to bring new value-added energy products and services to customers. By participating in joint initiatives and ecosystems in areas like biofuels, energy storage, hydrogen, carbon capture, EV charging, and the like, they can accelerate innovation while sharing risk and reward. 

BRENT POTTS is head of global marketing for the oil, gas, and energy industry at SAP.