ADIPEC 2025: six key takeaways

Energy industry leaders gathered in Abu Dhabi last week for ADIPEC 2025. The world’s biggest energy conference lived up to its billing, drawing a record crowd of more than 239,000 visitors over the four days. Wood Mackenzie was proud to be a Knowledge Partner for the conference, which has diversified from its historical focus on the oil value chain to an overarching theme consistent with the ‘Energy Addition’. This year’s embraced the full range of low-carbon technologies from biofuels to nuclear power. Here are our six key takeaways.

Oil and gas is back.

After a few years of subdued mood, the return of confidence among oil and gas participants was almost palpable. IOCs and NOCs talked tactically about building resilience into their portfolios in anticipation of price weakness and volatility in the near term.

A concerted message from senior executives and ministers was the expectation that, rather than declining, oil demand will continue to grow well into the next decade, and perhaps beyond. The big implication is that upstream must deliver the required supply to meet sustained oil demand. Strategically, companies are positioning to invest with the aim of strengthening their oil and gas production profiles for the 2030s.

AI – ‘Power is Knowledge’.

This 21^st-century twist on the old ‘Knowledge is Power’ axiom captures how AI has emerged from nowhere in the last three years to become a central driver of the global economy and energy market. Conference discussions focused on how the energy industry can meet surging power demand growth from data centres.

Gas-fired power is an important part of the solution for data centres in most cases, certainly in the US. The challenges for supply chains are huge, not least the three- to five-year waiting times for gas turbine deliveries, with permitting and regulation other big points of discussion. In contrast, plans to use carbon capture technology to curb emissions from new-build gas-fired plants were low down on the agenda.

Views are divided on how long AI-led energy demand growth will persist beyond the current rapid build-out of data centres, and whether advances in chip efficiencies will eventually dampen growth. However, the tech industry argues that digital AI will soon segue to ‘physical AI’, with robots the next big thing to propel demand growth.

Much discussion too on AI’s potential to enhance energy companies’ performance. Key applications include advanced reservoir modelling, plant automation, predictive maintenance, and efficient grid management and optimisation.

Investment in infrastructure is critical.

“You can’t run tomorrow’s energy system on yesterday’s grid” summed up the need to build modern electricity transmission and distribution networks. Grid infrastructure, including EV charging, accounts for more than a quarter of total future investment in energy and natural resources sectors through 2060 on Wood Mackenzie forecasts. That raised an important message from many at the conference: regulation must incentivise rather than derail investment.  

The politics of AI and energy.

A big US presence at ADIPEC this year pushed the Trump administration’s twin aspirations for energy dominance and winning the global AI arms race. The latter throws down the gauntlet at China, with Europe a distant third. Ultimately, data centres will be built where the power is cheap, and that is currently a competitive advantage for the US. However, with demand outpacing supply and strains on the supply chain, US power prices are already moving higher.

Wood Mackenzie predicted in January that rising electricity prices could emerge as a political hot potato, and politicians and industry leaders highlighted the issue on stage at ADIPEC. During the conference, the Democrats had a great night in US elections. Perhaps their most telling win was a victory for two public service commissioners in Georgia, swept in by a wave of consumer anger over electricity bills.

LNG – market volatility is here to stay.

That’s the inevitable consequence of 200 Mtpa of new LNG capacity, adding 50% of volumes to the market by 2031 leading to a prolonged period of oversupply from 2029. However, some market participants challenged that view, arguing that the demand will come to help rebalance the market, as it has in the past, for example when China responded to price signals in past downturns. The wider view was that sellers and buyers would need to work together through the period of supply growth to manage the risk of oversupply, by better understanding each other’s challenges and together creating more flexibility on contracts.

Decarbonisation is still a driving force, even if it is not talked about so much.

The impact of changes to energy and climate policy introduced by the current US administration, including reduced financial support, is starting to play out in other regions. Developers have become increasingly disciplined with their capital and will only invest in low-carbon opportunities with acceptable returns.

However, much of the energy industry is still looking to invest in solutions that reconcile increased oil and gas consumption with decreased emissions. Carbon capture, blue hydrogen and, above all, methane emissions reduction are still priorities among developers and consumers. Hydrogen producers say continuing cost reductions will make them competitive without subsidy within five years in some markets.

Thanks to: Ed Crooks, Kristy Kramer, Jon Story, Alexandre Araman, Chris Barry, Joshua Ngu, Amir Malik

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