Business environment year in review: 2025

Despite fears of a ‘hard landing’, the global economy proved more resilient than many had feared in 2025. However, the year was not without economic tensions. Tariff pressures, OPEC+ supply decisions, and geopolitical tensions meant operators adopted a measured approach through the year. The gas and liquefied natural gas (LNG) sectors saw North American supply grow. While partially offset by reduced Asian demand, European demand surged to replace Russian pipeline flows. In the US, the lifting of the LNG export permit pause provided renewed regulatory clarity. Exploration strategy was disciplined, but paid off with 11 billion BOE discovered, highlighted by giant finds in Brazil (Bumerangue), Cyprus (Pegasus), and Namibia. Upstream M&A slowed, shifting from mega-mergers to targeted growth, particularly in North American gas. The energy transition faced a reality check as low-carbon hydrogen final investment decisions dropped by 30%. However, the carbon capture utilisation and storage and geothermal sectors demonstrated resilience, with the latter seeing a surge in venture capital. The review concludes that while 2025 focused on value over volume, the outlook for 2026 has been fundamentally upended by the outbreak of the US–Iran war, shifting expectations from oil oversupply to geopolitical volatility and price spikes.