Oil: The Fall of a Giant in the Era of Renewable Energy

Oil refinery and solar panels — *Energy transition between oil and green energy. Image source: astronoo.com (new window)*

The Inevitable Decline of Fossil Fuels

Oil formed beneath the Earth's surface after the decomposition of marine microorganisms over millions of years. Conventional reserves are limited and extraction is becoming increasingly energy-intensive, which is measured by the EROEI factor (Energy Return on Energy Invested) …

Oil, the backbone of the global economy for over a century, faces unprecedented challenges. According to projections, global demand could peak before 2030, with an annual decline of $2.5\%$ thereafter. This transition is explained by three main factors: the depletion of reserves, environmental concerns, and the growing competitiveness of renewable energy.

N.B.:
The EROEI factor (Energy Returned On Energy Invested) is a key indicator for assessing the viability and efficiency of an energy source. It measures the ratio between the energy produced by a source and the energy spent to extract, transform, and distribute it.

Table of oil production by country in 2025

Top oil producers in 2025 (million barrels per day)
Country	Estimated production (Mb/d)	Global share (%)
United States	11.0	15
Saudi Arabia	10.5	14
Russia	10.0	13
Canada	5.0	7
China	4.0	5
Iraq	4.5	6
United Arab Emirates	3.0	4
Iran	3.5	5
Kuwait	2.5	3
Brazil	3.0	4

Source: IEA, World Energy Outlook 2024 (new window) and BP Statistical Review of World Energy 2025 (new window).

The Rise of Green Energy

Solar and wind energy have experienced exponential growth, with costs falling fivefold since 2010. The economic equation is becoming unavoidable: $C_{renewable} <C_{fossil}$ in most cases. Global investments in clean energy exceeded $1,000 billion in 2024, compared to $650 billion for fossil fuels.

Comparative table of global energy production in 2025

Global energy production by source in 2025
Energy	Global share (%)	Average cost per megawatt ($/MWh)	CO2 emissions (g/kWh)
Oil	30	120 $	730
Natural gas	25	80 $	490
Coal	20	60 $	950
Nuclear	10	100 $	12
Solar	8	45 $	40
Wind	6	50 $	15
Hydropower	1	70 $	24

Source: IEA, World Energy Outlook 2024 (new window) and BP Statistical Review of World Energy 2025 (new window).

Transition to the Green Revolution

Global oil production has peaked or is peaking in several regions. Substitution with renewable energy and storage technologies is essential to reduce the global carbon budget and limit climate warming.

Risks and impacts of the energy transition

Main risks and impacts related to the energy transition
Event	Energy impact	Economic impact	Comments
Global peak oil	Decrease in net energy flow	Increase in costs and price volatility	Varies according to oil types and extraction techniques
Transition to solar and wind	Intermittent production requiring storage	High investments but creation of green jobs	Requires improvement of smart grids and batteries
Massive deployment of electric vehicles	Increase in electricity demand	Transformation of industries and infrastructures	Risk of grid overload without planning
Decarbonization of heavy industry	Reduction in fossil fuel use	Reduction in carbon costs but high initial investments	May require the use of green hydrogen or biomass
Geopolitical instability linked to fossil energies	Indirect impact on energy security	Risk of economic fluctuations and raw material prices	Transition can reduce dependence on imports

Source: IEA, World Energy Outlook 2024 (new window) and BP Statistical Review of World Energy 2025 (new window).

Hydrogen, Solar, Nuclear: What Will Really Replace Oil?

The energy transition raises a central question: which sources can truly replace oil in our current economic and energy systems? Three main candidates stand out for their potential and physical constraints.

The answer is simple: No single source can replace oil in all its uses.

The combination of hydrogen, solar, and nuclear, with strong optimization of networks and storage, is the most realistic strategy to ensure a sustainable energy transition. This substitution will not be immediate and will depend as much on technological innovation as on global policies and investments. However, oil could remain a marginal production for specific uses, but its central role in the global economy will gradually disappear.

Hydrogen

Hydrogen is often presented as the energy vector of the future. Produced by water electrolysis or from natural gas (with CO2 capture), it can store and transport energy. Its overall energy efficiency remains limited by the production-storage-transformation chain, and the EROEI factor is often lower than that of fossil fuels. Nevertheless, hydrogen is particularly suited to heavy transport, industry, and the decarbonization of sectors that are difficult to electrify.

Solar

Solar photovoltaic energy is experiencing exponential growth, with an average cost per megawatt often lower than that of fossil fuels. However, its production is intermittent, dependent on weather and the day-night cycle, which requires massive storage solutions (batteries, pumped storage, hydrogen). In the long term, combined with smart grids, it could replace a significant part of the current electricity demand met by oil and gas.

Nuclear

Civil nuclear power offers stable, continuous, and low-CO2 production. Its specific power and energy density are significantly higher than those of renewable energies. However, constraints related to waste, safety, and the initial cost of facilities limit its rapid deployment. Nuclear can, however, play a key role in replacing oil in electricity production and, indirectly, in producing decarbonized hydrogen.