Oil Giants' Green Transition Stalls: Low-Carbon Investment Declines for First Time in 2025

According to a new report released on Wednesday by a financial media outlet covering the renewable energy industry, by 2025, the world’s top oil and natural gas companies will have cut their investments in green energy. This marks the first decline in their spending on low-carbon energy solutions since 2017.

The report found that last year, major global oil and gas companies reduced their green energy investments by more than one-third: from $38.2 billion in 2024 to $25.7 billion.

These giants are now prioritizing their core oil and gas businesses, which are more profitable than renewable energy, while regulatory opposition in the U.S. to projects like offshore wind has also dampened the enthusiasm of oil majors.

After initially promising in the early 2020s to gradually reduce fossil fuel production and invest billions in low-carbon energy, Europe’s largest oil and gas companies have dramatically shifted their priorities. The energy transition has proven to be much slower than expected, and the energy crisis of 2022 exposed shortcomings in traditional energy supplies.

European giants BP and Shell have reversed their commitments made in the early 2020s to cut oil and gas production by the end of this decade. Last year marked their renewed focus on increasing oil and gas investments and production, along with intensified exploration in key basins and promising new frontier areas.

These European giants have cut billions of dollars in renewable energy investments and are now seeking to bolster their oil and gas reserves. BP and Shell recognize that the obstacles to the energy transition are greater than anticipated, and in terms of profit margins and shareholder returns, they cannot deliver the same returns as oil and gas.

Shell CEO Wael Sawan has stated that reducing global oil and gas production would be “dangerous and irresponsible.”

In contrast, U.S. giants ExxonMobil and Chevron do not need to shift back to oil and gas—they never initially moved toward renewable energy. Both companies have continued to strengthen their oil and gas exploration and production, seeking to incorporate high-quality resources into their portfolios to increase reserves.