Top 6 energy investment themes in 2025

US President Donald Trump's election heralds a new era for the energy transition, marked by profound trade, geopolitical and economic risks but also big opportunities.

Trump's trade wars, policy upheavals in the US, China's clean energy blitz, a crude market under pressure and the emergence of artificial intelligence as a major force in the energy sector top our list of the big themes that will define 2025 for energy investors.

1.Trade wars will disrupt the energy transition

Trump's aggressive trade agenda will create a disruptive force for the energy transition.

Trump's promise to widely deploy tariffs would risk re-igniting inflation in the US, in turn putting upward pressure on interest rates, threatening to slow global economic growth and further fracture global trade lines. Those macro forces will have major consequences for energy companies and investors. Slower growth, for instance, would be a major headwind for oil and other commodity. Energy companies will have to redevelop their international supply chains to avoid trade penalties and skirt new geopolitical fault lines. China's dominant role in clean energy supply chains, including solar panels, batteries and electric vehicles, will continue to be a trade flashpoint with the US and Europe.

More fundamentally, there is a new polarity emerging in global energy markets between the US under Trump's presidency which wants to keep the global economy anchored in fossil fuels and China which sees clean energy as a strategic pillar of its economy and is accelerating its cleantech and exports.

2. End of the oil up cycle? Crude prices will be under pressure in 2025

Oil markets have been buoyed by surging post-pandemic demand, lagging supply and geopolitical upheaval since 2021. That cycle started showing signs of strain in 2024 as global oil demand slowed sharply and OPEC+ struggled to exert control over the market. We see a reckoning for oil markets in 2025.

S&P Global Commodity Insights models show a sizable supply overhang in 2025 as healthy growth from non-OPEC countries overwhelms demand that has returned to pre-pandemic growth levels. There are risks that could reverse this surplus, such as ramped up US sanctions on supply from Russia, Iran and Venezuela or supply shutdowns elsewhere. However, Commodity Insights analysts see prices under pressure this year, ushering in a new cycle for oil markets that will require a strategic rethink from OPEC+ and the industry.

3. Trump 2.0 will champion the domestic oil and gas industry. But there will be cleantech winners, too

Trump will put oil and gas production at the center of US energy policy in his second term, a sharp break from the Biden administration's focus on clean energy and climate change. But we expect there to be some areas of cleantech that continue to enjoy support.

The new administration is likely to support the deployment of carbon capture, utilization and storage as well as hydrogen, including so-called "blue" hydrogen, that uses natural gas and CCUS. Both technologies have received widespread support and investment from the oil and gas industry and Trump's top energy officials have supported these technologies in the past.

Nuclear energy, including restarting traditional plants and developing next generation small modular reactors, is also likely to see increased government support as the administration looks to underpin a new wave of power generation growth.

But there are also areas of cleantech set to come under pressure after enjoying support during the Biden presidency. We are likely to see incentives and policy support for electric vehicles reversed and new obstacles for the wind power industry.

4. The race to power AI is upending the power investment landscape

Big tech firms are in an AI arms race and will spend tens of billions of dollars in 2025, and have signaled they will invest hundreds of billions more in the coming years, building new energy-intensive datacenter capacity to underpin their AI ambitions.

The race to power those facilities has already shifted the power sector into growth mode and will drive new opportunities for generation and transmission investment and draw new pools of capital into the sector.

In the near term, we see this power surge favoring natural gas and renewables.

Constellation Energy's $26.6 billion deal to take over gas-generator Calpine in January underscores renewed investor interest in natural gas on higher demand expectations. Renewable power, backed up by batteries to extend flexibility and reliability, will also benefit from strong hyperscaler demand for low-carbon power, while frontier technologies such as next-generation nuclear and geothermal are also seeing new interest. However, this trend also links the fortunes of wide swathes of the energy sector to the development of AI, which presents unique risks to growth if the technologies growth trajectory shifts lower.

5. Build, baby, build? Stars may finally be aligning for an infrastructure boom

The Biden administration unleashed hundreds of billions of dollars in government support for energy projects and infrastructure, but deploying that capital has often been hampered by permitting and other regulatory roadblocks.

The stars may finally be aligning for a breakthrough on permitting that is needed to ignite an infrastructure boom. The Trump administration and a Republican-controlled Congress are set to make a major push to streamline federal permitting processes and promote domestic investment. At the same time, despite the significant policy uncertainty around cleantech, it is likely that Republicans will leave the Inflation Reduction Act's core renewable subsidies largely intact, which is key to spurring investment.

6. Kicking off the next wave of US LNG growth

LNG has been in the spotlight early in Trump's presidency as he swiftly ended former President Joe Biden's LNG authorization pause and has promised to quickly start approving new projects. That sets the stage for the next cycle of growth for the sector and a strong year for LNG dealmaking.

Analysts at Commodity Insights expect Venture Global's Plaquemines LNG and Cheniere's Corpus Christi LNG Stage 3 to ramp up over the course of the year and Golden Pass LNG – a joint venture between QatarEnergy and ExxonMobil – to potentially lift its first cargo in December 2025.

US gas production growth, however, will lag the new demand, potentially pushing US gas prices higher in 2025. In capital markets, Venture Global initial public offering in January will test investor appetite for exposure to LNG growth.

Further reading: Top 2025 themes: Trade wars, Trump and the race to power AI(opens in a new tab)