Global energy transition drags its feet as oil & gas reign over energy mix

January 2, 2026, by Melisa Cavcic

Against the backdrop of rising greenhouse gas (GHG) emissions, energy security and financial prudence are running the investment policy show, putting the transition to low-carbon and green sources of supply on the back burner, as fossil fuels dominate the energy mix, according to GlobalData, an intelligence and productivity platform.

Port — Illustration; Courtesy of Offshore Energy/Navingo

While the oil and gas industry enters 2026 facing a marked change in momentum regarding the energy transition, GlobalData’s strategic intelligence report, ‘Energy Transition in Oil & Gas,’ emphasizes that major oil and gas companies remain committed to reducing their carbon footprint as part of a shift toward lower-carbon business models.

Ravindra Puranik, Oil and Gas Analyst at GlobalData, commented: “In the past 12 to 18 months, the industry’s much-publicized energy transition push has remained largely at the stage of early discussions and limited pilot projects, rather than materializing at scale. The post-2022 energy disruption and related supply concerns have dampened the sector’s appetite for radical change to the energy mix.”

Even though many firms are maintaining net-zero ambitions for 2050 and interim targets for 2030, their strategies are said to have grown increasingly cautious, shaped by volatile market and policy conditions. As a result, energy-related CO2 emissions continue to reach new highs, underscoring the persistent dominance of fossil fuels in the world’s energy mix.

Puranik continued: “BP, for example, has now directed greater investments into upstream oil and gas, divested some of its upcoming renewable power projects, and lowered the near-term emissions goals.

“Similarly, Shell halted construction of its Rotterdam renewable fuels plant, citing a weak market outlook. BP and Shell’s renewed focus on financial discipline and value from conventional business mirrors a broader sector trend.”

The intelligence and productivity player highlights that the pace of the global energy transition is faltering, despite recurring climate-related catastrophes, such as record-breaking wildfires, extreme heatwaves, and ongoing calls for emission reductions.

GlobalData claims that major oil and gas players continue to work toward decarbonization goals they have set, often relying on existing and emerging technologies, as the investment in renewable power, especially wind and solar, continues, but with hesitation.

Puranik added: “The initial hype around the global energy transition has subsided in 2025. Profitability issues, inflation, and the withdrawal of government incentives in major markets, such as the US, have raised uncertainties around renewable projects.”

The company’s data shows carbon capture is increasingly used to mitigate emissions, while energy players are also exploring hydrogen, renewable power, and low-carbon fuels as alternatives, with batteries and other energy storage being investigated as additional avenues.

GlobalData underlines that 2025 has ushered in a period of strategic retrenchment, as major players scale back renewables, prioritizing traditional oil and gas, rather than accelerate transition plans, with most firms now opting for a measured approach to balance risk.

Puranik underscored: “Financial prudence and energy security are guiding decisions. While innovation continues, today’s transition is more incremental and pragmatic, and the rollout of large-scale low-carbon projects is still closely tied to market and policy evolution.”