One of the most significant outcomes of the summit was the agreement to establish a new global climate finance target. Known as the New Collective Quantified Goal (NCQG), this commitment sets a minimum benchmark of USD 300 billion per year by 2035, more than tripling the previous $100 billion pledge made in 2009. The funds are intended to support climate mitigation and adaptation efforts in developing countries. Although the delivery mechanisms are still being shaped, the volume of capital now being mobilised could eventually accelerate the build-out of renewable infrastructure in regions that are currently net importers of fossil fuels.

The question of how to approach fossil fuel use remained a complex and closely watched topic at COP29.  While delegates were unable to agree on a formal commitment to phase out fossil fuels, the final text retained language on reducing fossil fuel use, reflecting ongoing efforts to find common ground.  The continued presence of this issue on the agenda underscores its relevance and signals that discussions around the future role of oil and gas will remain active across policy, finance, and energy planning circles.  

Another notable development was the operationalisation of the Loss and Damage Fund, originally announced at COP27 and reaffirmed at COP28.  This mechanism is designed to channel support to countries suffering the most severe impacts of climate change.  In the months following COP29, the United States announced its withdrawal from the Fund’s board, a decision that has prompted discussions about the Fund’s governance and the implications for its long-term stability and funding commitments.

For oil traders, COP29 did not deliver immediate regulatory disruption.  There was no direct policy action that alters the short-term outlook for crude markets.  However, the broader themes—growing climate finance, persistent pressure on fossil fuels, and increased institutional focus on transition pathways—are shaping the environment in which long-term trading strategies are made.

Even in the absence of a global fossil fuel exit timeline, investors and counterparties are increasingly assessing exposure through the lens of climate risk.  Understanding how public sentiment, capital flows, and policy frameworks evolve in the post-COP29 world will be key to maintaining resilience in the years ahead.

Sources:

Carbon Brief. “COP29: Key Outcomes Agreed at the UN Climate Talks in Baku – Carbon Brief.” Carbon Brief, 24 Nov. 2024, www.carbonbrief.org/cop29-key-outcomes-agreed-at-the-un-climate-talks-in-baku/.

Lo, Joe. “Fossil Fuel Transition Talks Rescued from Brink of Collapse at COP29.” Climate Home News, 18 Nov. 2024, www.climatechangenews.com/2024/11/18/fossil-fuel-transition-talks-rescued-from-brink-of-collapse-at-cop29/.

Abnett, Kate, and Virginia Furness. “United States Quits Board of UN Climate Damage Fund, Letter Shows.” Reuters, 7 Mar. 2025, www.reuters.com/world/us/united-states-quits-board-un-climate-damage-fund-letter-shows-2025-03-07/.

Calma, Dean. Outside Passage Leading to the Delegate Offices at the United Nations Climate Change Conference UNCCC COP29 Held in Baku, Azerbaijan., www.flickr.com/photos/iaea_imagebank/54157180158.

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Perovskites—named for their distinctive crystal structure—have emerged as one of the most promising upgrades to traditional silicon solar panels.  In April 2025, a Chinese manufacturer achieved a certified power conversion efficiency of 34.85% for a two-terminal tandem perovskite-silicon solar cell. These cells are not only more efficient but also offer advantages in terms of flexibility and lightweight design, making them suitable for a variety of applications, including building-integrated photovoltaics and portable power sources.  Manufacturers are racing to solve durability and scalability issues, but the direction of travel is clear: lighter, more adaptable solar tech is coming.

Green hydrogen, produced via electrolysis powered by renewable energy, is also gaining attention as a clean fuel alternative.  While the technology holds promise, high production costs remain a significant barrier.  However, projections suggest that costs could decrease by 60-80% by 2030, potentially achieving cost parity with grey hydrogen in many regions.  In the UK, a consortium of businesses has proposed a £6.5 billion project to build one gigawatt of green hydrogen production capacity by 2030, aiming to deliver hydrogen at a competitive price.  

For oil companies, it’s not about jumping ship—but staying informed on the technologies that are reshaping power generation economics and starting to impact policy direction.  While neither perovskites nor green hydrogen will displace fossil fuels overnight, both are worth watching closely in 2025.

Sources:

Shaw, Vincent. “Longi Achieves 34.85% Efficiency for Two-Terminal Tandem Perovskite Solar Cell.” Pv Magazine International, 18 Apr. 2025, www.pv-magazine.com/2025/04/18/longi-achieves-34-85-efficiency-for-two-terminal-tandem-perovskite-solar-cell/.

Research and Markets. “Green Hydrogen Costs to Drop 60-80% by 2030 as Industry Shifts towards Sustainable Energy – New Global Hydrogen Market Report 2025 Released.” GlobeNewswire News Room, Research and Markets, 6 Mar. 2025, www.globenewswire.com/news-release/2025/03/06/3037977/28124/en/Green-Hydrogen-Costs-to-Drop-60-80-by-2030-as-Industry-Shifts-Towards-Sustainable-Energy-New-Global-Hydrogen-Market-Report-2025-Released.html

Gill, Oliver. “UK Businesses Plan £6.5bn Project to Raise Hydrogen Production.” Thetimes.com, The Sunday Times, 12 Apr. 2025, www.thetimes.com/business-money/companies/article/uk-businesses-plan-65bn-project-to-raise-hydrogen-production-08zh8ghf3

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The US has ramped up its use of secondary sanctions, with a sharper focus on oil flows connected to sanctioned jurisdictions. Executive Order 14245 introduced in March threatens trade retaliation against countries indirectly supporting sanctioned energy markets. For trading companies, this adds a new layer of exposure—extending risk well beyond direct transactions.

At sea, the increasing reliance on so-called “shadow fleets” has further complicated operations. The industry has seen a rise in ship-to-ship transfers in international waters to obscure cargo origin, often involving older vessels with unclear ownership and expired insurance. These movements are under growing scrutiny. In April, the US Treasury updated its maritime advisory on sanctions evasion tactics, cautioning companies against indirect facilitation of prohibited trades.  

Meanwhile, the UK and EU have also widened their enforcement scope. Recent measures included new designations of individuals, companies, and vessels linked to the movement of sanctioned oil. These additions have already prompted many shipowners and insurers to reassess exposure, particularly where vessels may have interacted with restricted cargoes in the past.

The message to the trading community is clear: compliance can no longer be reactive. Firms are expected to conduct thorough due diligence across the supply chain, including vessel tracking, counterparty risk assessments, and documentation review. With enforcement actions becoming more frequent and fines increasing, the cost of falling behind is growing.

The second half of 2025 is likely to bring more of the same—heightened vigilance from regulators and increased pressure on market participants to adapt. For oil traders, agility and robust internal controls are no longer optional—they are essential.

Sources:

“Executive Order 14245—Imposing Tariffs on Countries Importing Venezuelan Oil | the American Presidency Project.” Ucsb.edu, 2025, www.presidency.ucsb.edu/documents/executive-order-14245-imposing-tariffs-countries-importing-venezuelan-oil.

Liu, Siyi. “Russian Arctic Oil Exports to China Jump Helped by STS Transfers, Sources Say.” Reuters, 17 Apr. 2025, www.reuters.com/business/energy/exports-sanctioned-russian-arctic-oil-china-set-rise-april-sources-say-2025-04-17/.

Psaledakis, Daphne. “US Issues New Sanctions Targeting Chinese Importers of Iranian Oil.” Reuters, 16 Apr. 2025, www.reuters.com/world/us-issues-new-sanctions-targeting-chinese-importers-iranian-oil-2025-04-16/.

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There was, of course, some controversy: the president of COP28 was Sultan al-Jaber, head of the Abu Dhabi National Oil Company.  Climate campaigners considered this inappropriate and illogical, but in his own words, “not having oil and gas and high-emitting industries on the same table is not the right thing to do. We need to reimagine this relationship between producers and consumers. We need this integrated approach.”  In fact, around 2,400 delegates connected to the coal, oil, and gas industries were in attendance, a number that has quadrupled from COP27.

For the first time, countries agreed on the need to start “transitioning away from fossil fuels in energy systems, in a just, orderly and equitable manner, accelerating action in this critical decade, so as to achieve net zero by 2050 in keeping with the science”.  

At the meeting, a landmark deal was also made to commit US$700m to the loss and damage fund to rehabilitate vulnerable countries affected by the climate crisis.  This fund was agreed at COP27 with the idea that wealthier countries pay poorer countries.  For decades, richer nations have been veering away from paying for their historic carbon emissions.  The US, for instance, wanted to make clear that its contribution to the fund was not compensation for past emissions.

Although its critics accuse the conference of letting business and governments promote climate credentials and policies without actually implementing the, the COP summits are important.  They offer the potential for global agreements, such as the 1.5C warming limit which was agreed on at COP21.

At the end of the day, it is up to the world to put into practice the resolutions of COP28 and future COPs.

Sources:

Poynting, Mark. “What Was Agreed on Climate Change at COP28 in Dubai?” BBC News, BBC, 13 Dec. 2023, www.bbc.co.uk/news/science-environment-67143989.

McGrath, Matt. “COP28: Record Number of Fossil Fuel Delegates at Climate Talks.” BBC News, BBC, 5 Dec. 2023, www.bbc.co.uk/news/science-environment-67607289.

McGrath, Matt. “Poor Countries Win Fight for Climate Cash at Cop28.” BBC News, BBC, 30 Nov. 2023, www.bbc.co.uk/news/science-environment-67581277.

“‘I Wasn’t the Obvious Choice’: Meet the Oil Man Tasked with Saving the Planet.” The Guardian, Guardian News and Media, 7 Oct. 2023, www.theguardian.com/environment/2023/oct/07/meet-the-oil-man-tasked-with-saving-the-planet-cop28.

“‘The Future Is Renewable’: How a Huge Gamble Sealed COP28 Deal.” The Guardian, Guardian News and Media, 15 Dec. 2023, www.theguardian.com/environment/2023/dec/15/fossil-fuels-how-a-huge-gamble-sealed-cop28-deal.

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In the oil and gas industry, the first two examples are most immediately relevant.  Machine learning in energy trading is not a novel concept – with a fluctuating and volatile market, the ability to predict price trends using complex coded algorithms, for example, has been part of the trading strategy for many large oil producers and traders.

Beyond the usefulness of AI in a trading office, there are also benefits to deploying AI in the upstream and midstream.  One of the avenues through which investments are being made in AI is for the prospection of oil.  This is technology where robots can assess drilling sites and predict well performance, saving time and capital expenditure.

AI can also be used to predict the duration of refinery shutdowns thereby reducing millions of dollars that unplanned outages tend to cost the oil industry.  Refiners can also take advantage of AI analytics to anticipate potential mechanical failures before they even occur.

There is also the optimistic outlook that the use of AI methodologies can increase efficiency in the chain, thus indirectly reducing carbon emissions in the long run.

In the natural gas industry, AI is being used by producers to lower methane emissions.  One such data company is Project Canary which differentiates gas.  Natural gas that is produced with lower emissions can be labelled differentiated, low-carbon, or responsibly-sourced, which makes it more appealing to environmentally-conscious consumers.

Having the right AI capabilities, however, is instrumental for companies to reap the benefits of machine learning.  Companies must also redesign their day-to-day operations and be equipped to implement the automation.  Ultimately, cognitive technology will change the landscape in which we as an industry operate.

Sources:

Beaman, Jeremy. “Power of AI: Oil and Gas Sector Drills down into Methane Emissions Data.” S&P Global Commodity Insights, S&P Global Commodity Insights, 24 Oct. 2023, www.spglobal.com/commodityinsights/en/market-insights/latest-news/natural-gas/102423-power-of-ai-oil-and-gas-sector-drills-down-into-methane-emissions-data.

Sharma, Gaurav. “How Multibillion Dollar Investments in AI Are Driving Oil and Gas Sector Innovation.” Forbes, Forbes Magazine, 5 Oct. 2023, www.forbes.com/sites/gauravsharma/2023/08/14/how-multibillion-dollar-investments-in-ai-are-driving-oil-and-gas-sector-innovation/?sh=1f18c4a71ff7.

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Entered into force in 2016, goals of the Paris Agreement are to:

Limit global warming to 1.5°C by the end of the 21st century and to keep them well below 2.0°C above pre-industrial levels.  Crossing the 1.5°C mark would put the world at risk of even more severe impacts on climate change and even more extreme weather.
Limit greenhouse gas emissions to the same levels that trees, soi, and oceans can naturally absorb between 2050 and 2100.  This is what we otherwise call “net zero”.

For the Paris Agreement to work, countries must submit their nationally determined contributions (NDCs) in which they specify the actions they will take to reduce greenhouse gas emissions and build resilience to adapt to rising temperatures. Every five years, countries are expected to update their NDCs.  Subsequent NDCs are meant to be more ambitious than the previous ones. Countries are also encouraged, but not required, to submit long-term strategies.

Developing countries produce more than half of today’s greenhouse gases but are limited by finances and capacity. These countries have been demanding funds for loss and damage incurred from the effects of climate change. Developed countries are therefore expected to take the lead in providing financial assistance (or climate finance) to more vulnerable countries and support them in their emissions control and adaptation efforts. At COP27 in 2022, countries agreed to setting up a fund, and at COP28, US$700m was committed.

However, the strength of the Paris Agreement, being an all-nations cooperative effort, is dependent on its many participants to remain committed to the joint task. Scientist also argue the need to assess the progress made toward its goals every year.

Sources:

“The Paris Agreement.” Unfccc.Int, United Nations Framework Convention on Climate Change, unfccc.int/process-and-meetings/the-paris-agreement. Accessed 18 Nov. 2023.

“The Paris Agreement.” United Nations, United Nations, www.un.org/en/climatechange/paris-agreement. Accessed 18 Dec. 2023.

“The Paris Agreement.” MIT Climate Portal, climate.mit.edu/explainers/paris-agreement. Accessed 18 Nov. 2023.

Stallard, Esme. “Why Is the Paris Climate Agreement Still Important?” BBC News, BBC, 27 Nov. 2023, www.bbc.co.uk/news/science-environment-35073297.

Poynting, Mark. “What Was Agreed on Climate Change at COP28 in Dubai?” BBC News, BBC, 13 Dec. 2023, www.bbc.co.uk/news/science-environment-67143989.

The post What is the Paris Agreement? first appeared on Crude Oil & Petroleum Trading Group | Energix Petroleum.

The existing energy framework we have was built for a different climate. Today, this system is no longer sufficient because of rising temperatures and more extreme weather – very hot summers and blistering winters. Hence, the world needs to find a balance between managing the existing levels of climate change and trying to hold off the rate of global warming.

The last few decades have seen the world rapidly develop clean energy technologies like wind- and solar-generated power. Electric cars are also accessible. We also have international frameworks in place like the Paris Agreement and the annual United Nations Climate Change Conferences which we colloquially refer to as COP. Energy transition has become a major talking point but, aside from being a popular topic, it is something the energy industry has come to take seriously.

In fact, oil and gas companies have been investing in renewables since the 1980s. Today, oil companies are committed to investing billions of dollars in energy efficiency. These companies are actually very well placed to lead the energy transition: they already have experience with large-scale projects, storage and transportation, and a deep understanding of the energy needs of consumers.

What we as the global population also need to consider is the affordability of clean energy for poorer countries. Roughly US$1 trillion is needed in investments in the power sector for developing countries to meet their climate goals. Demetrios Papathanasiou, Global Director of Energy and Extractives at the World Bank, says that “poorer countries are stuck in a vicious cycle where they pay more for electricity, cannot afford the high upfront cost of clean energy, and are locked into fossil fuel projects. In essence, they are paying a triple penalty for the energy transition.”

Furthermore, many of these countries do not have the strong governance that is so fundamental to signal to investors that the country is suitable for private investment into its clean energy transition.

Even in developed countries at the household level, high upfront costs of clean energy solutions make them inaccessible for those with lower incomes. Despite the long-term promise of electricity bill savings, making that switch can cost two-thirds of someone’s yearly salary.

The global move towards clean energy therefore requires solutions from governments and large corporations to uplift those who cannot afford it. At Energix Petroleum, our teams are consistently researching our options to invest in clean energy with a view to support the global energy transition.

Sources:

Jacob, Julia, and Dan Peck. “Record-Breaking Wildfires Have Occurred All over the Northern Hemisphere during 2023, New Report Finds.” ABC News, ABC News Network, abcnews.go.com/US/record-breaking-wildfires-occurred-northern-hemisphere-2023-new/story?id=103169036. Accessed 19 Dec. 2023.

“‘I Wasn’t the Obvious Choice’: Meet the Oil Man Tasked with Saving the Planet.” The Guardian, Guardian News and Media, 7 Oct. 2023, www.theguardian.com/environment/2023/oct/07/meet-the-oil-man-tasked-with-saving-the-planet-cop28.

International Energy Agency (2023), World Energy Outlook 2023, IEA, Paris https://www.iea.org/reports/world-energy-outlook-2023, License: CC BY 4.0 (report)

Kienzler, Clemens, et al. “How Oil and Gas Companies Can Be Successful in Renewable Power.” McKinsey & Company, McKinsey & Company, 27 Feb. 2023, www.mckinsey.com/industries/electric-power-and-natural-gas/our-insights/how-oil-and-gas-companies-can-be-successful-in-renewable-power.

“Breaking down Barriers to Clean Energy Transition.” World Bank, World Bank Group, 18 May 2023, www.worldbank.org/en/news/feature/2023/05/16/breaking-down-barriers-to-clean-energy-transition.

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By any measure, China’s growth has been rapid and unprecedented. Not only has it eradicated extreme poverty, it has also made large improvements in access to healthcare and education. Its post-COVID fiscal policy is expected to remain expansionary. On the energy side, more than half of global demand growth in the last ten years can be attributed to China.

There are several factors that account for this growth in China’s energy demand: High-tech manufacturing in clean energy areas like photovoltaic systems and electric vehicles continues to grow. In 2022, revenue for listed manufacturers in these two sectors alone amounted to US$300 billion. China is also on track to add on the same amount of capacity as the combined capacity of all OECD countries in Europe and Asia so there continues to be a strong demand for petrochemical feedstock. Finally, hydroelectricity production has been inhibited by droughts which further contributes to its energy demand.

China continues to be one of the largest oil consumers globally. Its oil imports in this decade are correspondingly set to increase. It is also the world’s largest coal consumer, producer and importer and the world’s largest natural gas importer.  Around 70% of China’s electricity is still generated from fossil fuels fuels and China accounts for 27% of annual global carbon dioxide and a third of greenhouse gas emissions.

Despite China being the largest consumer of fossil fuels, it is also the leader, spending US$650 billion annually on several clean energy technologies. It dominates the solar panel supply chain and has brought down the price of solar components to the lowest it has ever been.

By the end of 2026, China is expected to have 1,000GW of solar power alone. Globally, 11,000GQ is needed to meet the 2030 targets of the Paris Agreement. Given China’s size, the world’s environmental problems cannot be resolved without its engagement. The future of energy is undoubtedly very much influenced by China’s growth and energy transition.

Sources:

World Bank and the Development Research Center of the State Council, the People’s Republic of China. 2022. Four Decades of Poverty Reduction in China: Drivers, Insights for the World, and the Way Ahead. Washington, DC: World Bank. doi:10.1596/978-1- 4648-1877-6. License: Creative Commons Attribution CC BY 3.0 IGO

International Energy Agency (2023), World Energy Outlook 2023, IEA, Paris https://www.iea.org/reports/world-energy-outlook-2023, License: CC BY 4.0 (report)

Howe, Colleen. “Explainer: The Numbers behind China’s Renewable Energy Boom.” Reuters, 16 Nov. 2023, www.reuters.com/sustainability/climate-energy/numbers-behind-chinas-renewable-energy-boom-2023-11-15/.

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