Introduction and summary
Under policies currently in place, oil and gas demand is likely to continue rising.1 This could cause oil prices to nearly double by midcentury and the climate to continue warming indefinitely.2 If global climate policies are strengthened, however, oil and gas demand could plateau or even peak in the next 10 years, which would cut oil prices and prevent greenhouse gas emissions from increasing.3 Which scenario wins out depends on the policy choices of a subset of countries that will determine the trajectory of future oil and gas demand. Using data modeling from the 2025 Rhodium Climate Outlook, this report finds that by advancing decarbonization with international partners through U.S. trade policy, security partnerships, and development assistance, the United States could help reduce global oil and gas demand by 10 percent from 2030 to 2050, rather than increase by more than 15 percent over the same time period.4 Through these key relationships, the United States can significantly influence global oil and gas demand.
The Trump administration, however, is focused on increasing demand for oil and gas rather than decreasing it, putting the short-term interests of a narrow set of U.S. fossil fuel producers ahead of the lives, livelihoods, and security of the overwhelming majority of Americans and U.S. allies. This administration has worked with the Republican-controlled Congress to reverse U.S. federal policies designed to increase the deployment of clean energy technology. From electric vehicles to clean energy projects, the Trump administration has rolled back tax credits5 and revoked funding incentivizing clean energy technology adoption.6 President Donald Trump has tied the purchase of U.S. fossil fuels to more favorable tariff rates as part of a string of trade deals7 and has directed the U.S. Export-Import Bank to spend billions to export U.S. natural gas around the world in the name of “energy dominance.”8 This is out of step with the rest of the world, as most countries are eager to accelerate the deployment of clean energy technologies, not revert back to the dirty and increasingly antiquated fuels of the past.9 Moreover, pushing other countries to demand more oil and gas will raise prices here at home.10
Instead of actively pushing international partners to increase their reliance on oil and gas, the United States could—under future leadership—work with other countries to decrease global demand for oil and gas to achieve mutually beneficial goals, such as energy security, affordability, supply chain resilience, and climate risk reduction. Economic and security partners with historically strong relationships with the United States that stand to benefit from shifting to cleaner, renewable sources of energy are prime partners in this effort. These countries can be divided into three categories:
- Major trading partners that export industrial goods to the United States
- Countries with formal or informal security guarantees that are heavily reliant on energy imports
- Historical recipients of U.S. foreign development assistance
These three groups include 64 countries and the European Union, along with their associated sectors. Together with the United States, these countries are projected to drive between 54 and 58 percent of global oil and gas demand in 2050—enough to shape the global trajectory on energy prices.11 A strategic approach to collaboratively reducing consumption of oil and gas could be the key to lowering global pollution and fuel prices at the same time.
Understanding possible future scenarios
This report looks at the high and low oil and gas demand projections in a likely scenario. This means that there is a 67 percent probability that future oil and gas demand for a given country or set of countries ends up falling between those two projections.
Taking Sweden as an example, their oil and gas demand in 2050 is just as likely to be 200 trillion British thermal units (TBtu), the low projection in a likely scenario, as it is to be 263 TBtu, the high projection in a likely scenario.12 The average projection, meanwhile, is 231 TBtu. Effective decarbonization policy could help Sweden achieve closer to the lower end of oil and gas demand—200 TBtu—in 2050, rather than the high projection. For each country and set of countries, this gap between the high potential and low potential for oil and gas demand in a given year presents a range of potential outcomes that could be influenced by policy choices.
Lower oil and gas demand means cheaper, more reliable energy for Americans
Decreasing demand for oil and gas in other countries—which will account for most planet-warming emissions going forward—has direct benefits for Americans. Reducing global greenhouse gas emissions resulting from oil and gas consumption decreases the risks associated with living in a warming world, including extreme weather,13 food supply shortages,14 displacement,15 and more. In 2024 alone, the United States experienced 27 disasters fueled by climate change, resulting in nearly 600 deaths and more than $182 billion in damages.16 Climate change impacts also contribute to economic shocks by disrupting supply chains and global commerce,17 which could trigger prices to rise for goods Americans rely on.18
A drop in demand for oil and gas globally also translates into downward pressure on gasoline and home energy costs for Americans.19 For example, the U.S. Energy Information Administration projects 2026 oil demand to decrease compared with that of previous years, leading to an oversupplied oil market. This is expected to lower costs by more than 6 percent per gallon of gas in 2026 compared with 2024.20 Lower global demand for liquefied natural gas (LNG) disincentivizes U.S. producers to export; fewer exports of LNG drives down the cost for Americans who have access to a more abundant domestic supply.21 Reduced demand for oil, in particular, also reduces reliance on volatile markets and authoritarian regimes whose interests may, and often do, diverge from those of the United States. The Organization of the Petroleum Exporting Countries (OPEC), a cartel made up of major oil-producing countries, regularly colludes to raise prices by cutting oil production.22 By continuing to rely heavily on oil, the rest of the world lacks leverage to challenge this blatant price gouging.
The benefits of decreasing global demand for oil and gas would reduce climate impacts, reduce American energy costs, and diversify supply chains amid more competitive markets around the world.
Currently, the Trump administration is pursuing a strategy with allies and partners to increase demand for oil and gas globally.23 President Trump has imposed arbitrary tariffs on friends and competitors alike and then negotiated deals with many to ensure they purchase more U.S. natural gas. His administration sabotaged a multilateral plan to cut emissions from the shipping sector24 and halted promised funding to support renewable energy projects around the world.25
Trump’s pro-fossil fuel, anti-climate strategy is a losing one for Americans. Already, residents of nearly every state in the country face rising electricity costs,26 and Trump administration policies will increase prices even more.27 Additionally, increased global demand for oil and gas stands to drive up energy costs, accelerate the onset of dangerous climate impacts, and further a risky reliance on volatile markets and producers. The inverse is also true: The benefits of decreasing global demand for oil and gas would reduce climate impacts, reduce American energy costs, and diversify supply chains amid more competitive markets around the world.
Incentivizing decarbonization through U.S. trade policy
The United States has the largest import market by value28 and the highest levels of consumer spending,29 so access to the U.S. market is highly valued. For that reason, the United States can incentivize and accelerate decarbonization in other countries through trade. An example of trade as a tool to encourage decarbonization in other economies is the EU’s Carbon Border Adjustment Mechanism (CBAM), which works by placing a fee on carbon-intensive imports to encourage cleaner production.30 This law specifically focuses on industrial imports,31 among other goods, such as steel, cement, and fertilizers, that are the fastest-growing sources of emissions globally.32 Coupled with the EU Emissions Trading System (ETS), an emissions cap-and-trade program through which emissions allowances are sold at auction, the EU is working to drive down domestic carbon emissions from industry while ensuring the competitiveness of less carbon-intensive goods manufactured within the bloc.33
Similar legislation has been introduced in the U.S. Congress, including Sen. Sheldon Whitehouse (D-RI)’s Clean Competition Act, which, if enacted, would place fees on carbon-intensive imports to the United States.34 It also creates the opportunity to establish “carbon clubs” through which countries with a domestic carbon pricing tool, such as the EU ETS, could be exempt from incurring fees on exports to the United States, providing a flexible yet effective way for countries to work with the United States to decrease greenhouse gas emissions.35 Decarbonization through trade could also be taken beyond bilateral arrangements into the multilateral space by pursuing a plurilateral green trade arrangement among countries that are motivated to decarbonize their industrial sectors.36 Such an agreement could help standardize carbon intensity requirements in traded goods and create a more collaborative, inclusive, climate-aligned trade regime, rather than a restrictive one.
Major exporters of industrial products to the United States include Brazil,37 Canada,38 Chile,39 China,40 Colombia,41 Germany,42 India,43 Italy,44 Japan,45 Mexico,46 South Korea,47 Taiwan,48 Trinidad and Tobago,49 Turkey,50 the United Kingdom,51 and Vietnam52 and could therefore be subject to higher costs to export to the United States under a U.S. carbon tariff. The demand for oil and gas from the industrial sectors in these countries could be anywhere from 27,600 TBtu to 45,000 TBtu by 2050, representing anywhere from 11 to 14 percent of global demand.53 Taking steps to decarbonize industry in these countries could have a significant global impact, and encouraging decarbonization of industry through U.S. trade policy could accelerate the decline in oil and gas use.
Read the accompanying fact sheet
Prioritizing energy security in security partnerships
The United States maintains security partnerships with many countries around the world, and for those that rely on energy imports to meet half or more of their net energy use, this dependence could undermine their security. Energy security and national security are inextricably linked. In the aftermath of the Russian invasion of Ukraine, the European Union faced the threat of an energy crisis after Russia cut off pipeline gas supplies and EU countries, along with many others, imposed sanctions on Russian oil.54 The impacts of this crisis reverberated around the world, even affecting energy prices outside of the region, with lingering effects three years later.55 Though the EU was ultimately able to head off energy shortages by increasing imports of natural gas from Norway and the United States, European Commission President Ursula von der Leyen said that reliance on Russian fossil fuels “exposed us to blackmail.”56 Reliance on oil and gas inherently creates a cycle of dependency that can be exploited by bad actors, since imports of fossil fuels must be maintained to meet energy needs. Renewable energy technologies and their supply chains, by comparison, require less consistent imports to generate and maintain energy57 and can be more easily diversified, reducing foreign leverage over a country’s ability to meet their energy needs.
In a future U.S. administration, elevating energy security through decarbonization to the level of traditional security could both increase partners’ security as well as accelerate countries’ shift away from oil and gas, ultimately contributing to Americans’ security and economic interests. The Quadrilateral Security Dialogue, a security partnership between the United States, Australia, India, and Japan, took steps to do just this; with the Wilmington Declaration, issued in September 2024, the four countries committed to use policy and public finance to catalyze private investment in clean energy supply chains in the name of energy security and economic opportunities.58 As part of this commitment, Australia, India, and Japan announced more than $150 million in investments to diversify clean energy supply chains through the Quad Clean Energy Supply Chain Diversification Program and support renewable energy projects across the Indo-Pacific. The Quad’s prioritization of energy security through decarbonization can serve as a new model for energy security partnerships with energy import-reliant security partners.
Reliance on oil and gas inherently creates a cycle of dependency that can be exploited by bad actors.
Of the existing U.S. security partnerships, the following countries rely on energy imports to meet at least half of their energy needs: Chile, Costa Rica, the Dominican Republic, El Salvador, Honduras, Japan, Jordan, Morocco, Panama, the Philippines, Singapore, South Korea, Taiwan, Thailand, Tunisia, Turkey, and the European Union.59 While Ukraine does not meet this criterion, it is energy-insecure as a result of sustained Russian attacks on its energy infrastructure, making access to energy uncertain.60 Together, these countries are projected to consume about 48,600 TBtu of oil and gas by 2050, yet their demand for oil and gas in 2050 could be nearly 18 percent lower in a likely scenario.61 Prioritizing energy security through decarbonization could contribute to decreased demand for oil and gas in these countries.
Reliance on energy imports unites these varied countries, yet each faces unique security threats that require tailored security assistance and strategy. For example, a central focus of the U.S.-Morocco security relationship is countering terrorism and illicit trafficking,62 while the U.S.-Japan security relationship is rooted in regional stability.63 These differences in security concerns translate into necessarily different forms of security assistance from the United States, such as financial support to Morocco64 and arms sales to Japan.65 Yet both security strategies in Morocco and Japan are threatened by climate change and energy insecurity: Climate change exacerbates vulnerabilities that lead to a higher prevalence of conflict66 and human trafficking,67 and reliance on continuous fossil fuel imports creates a point of leverage that can be exploited, potentially affecting the wider Asia-Pacific region. Despite the highly specific needs of each security partner, prioritizing decarbonization in the name of energy security is mutually beneficial across these countries in order to preempt future energy shocks. How decarbonization is prioritized and operationalized should look different depending on the unique needs of each country.
Deploying funding and expertise for sustainable development
Prior to the Trump administration’s dismantling of the U.S. Agency for International Development (USAID) in early 2025,68 the United States provided sustainable development assistance for projects69 ranging from sustainable infrastructure development70 to renewable energy projects.71 Currently, most developing countries use far less oil and gas than developed countries. However, as they continue to grow their economies, their use of oil and gas could increase significantly.72 Development assistance programs can allow countries to build out clean energy infrastructure and technologies now to avoid fossil fuel lock-in and significant consumption of oil and gas in the future while also increasing these countries’ energy security.
Recipients of U.S. foreign development assistance in the past five years include Angola, Bangladesh, Benin, Cambodia, Cameroon, Côte d’Ivoire, Democratic Republic of the Congo, Egypt, El Salvador, Eritrea, Eswatini, Ethiopia, Ghana, Haiti, Honduras, India, Indonesia, Kenya, Kyrgyzstan, Madagascar, Mongolia, Morocco, Mozambique, Myanmar, Nepal, Nicaragua, Niger, Nigeria, Pakistan, the Philippines, Republic of the Congo, Rwanda, Senegal, South Sudan, Sudan, Tajikistan, Tanzania, Togo, Tunisia, Uganda, Ukraine, Uzbekistan, Vietnam, Yemen, Zambia, and Zimbabwe.73 Together, these countries could drive as much as 21 percent of global oil and gas demand in 2050.74 Yet, in a likely scenario, 2050 oil and gas demand from these countries could be as low as 17 percent of global demand.75 Providing financial support, technical expertise, and technology-sharing to drive clean energy adoption could help keep future oil and gas demand in these countries closer to the lower end of that range.
In particular, investing in decarbonizing the transportation and power sectors in these countries could translate into lower global demand for oil and gas by 2050. The transportation sector could account for 45 to 60 percent of overall oil and gas demand from these countries—the largest driver of oil and gas demand among all sectors.76 The gap between the high projection and low projection for demand in the transportation sector in a likely scenario indicates that focusing development assistance on decarbonizing this sector could noticeably decrease fossil fuel demand. The power sector, meanwhile, could account for anywhere between 6 and 24 percent of all oil and gas demand from these countries by 2050 and would be another strategic sector for the United States to dedicate financial support and technology-sharing in order to decarbonize.77 Beyond decreasing global oil and gas demand, decarbonizing these sectors would also lead to co-benefits, including the development of supply chains and critical infrastructure that are more resilient and secure.78
The razing of U.S. foreign development assistance infrastructure under the Trump administration means that resuming development assistance will take many months, if not years. Yet rebuilding presents the opportunity to make decarbonization central to all development spending. Under the Biden administration, incorporating climate change into existing USAID strategy and programs was a priority, and many existing programs were recognized for their climate co-benefits.79 However, reenvisioning development assistance as a tool to further decrease demand for oil and gas will ensure partners build out clean energy economies that are not reliant on oil and gas. As these countries develop, this U.S. investment can also yield resilient supply chains for goods and raw materials needed by the United States, yielding benefits at home and abroad.
See also
Policy recommendations
Using trade, security, and development assistance to target key countries can provide a future U.S. presidential administration and Congress the opportunity to have an outsize impact on lowering global oil and gas demand through the following recommendations:
- Trade: With the support of Congress, a new administration can enact a U.S. CBAM while also pursuing a plurilateral green trade arrangement among countries that are motivated to decarbonize their industrial sectors.80 A unified effort among many countries would standardize covered goods and carbon-intensity parameters while also creating a larger market incentive to drive decarbonization investments.
- Security: Energy security should be prioritized to the level of traditional security through decarbonization and its incorporation into strategy development and planning. Featuring decarbonization in security planning should be coupled with financial assistance and technical support from the United States as needed.
- Development assistance: U.S. foreign development assistance should be restored, modernized, and streamlined to provide funding, expertise, and technical assistance that centers greenhouse gas mitigation with a focus on the transportation and power sectors. Doing so will be challenging to enact immediately, given the loss of agency infrastructure following the dismantling of USAID. Yet rebuilding development assistance from the ground up presents an opportunity to integrate decarbonization into the new model.
These policy tools should be used in tandem, as many countries fall into more than one category. Coupling trade policy with development assistance to help decarbonize the industrial sector in a country such as Vietnam, for example, could accelerate a drop in their oil and gas demand, since financial support can be directed toward greening their cement and steel manufacturing. Furthermore, grouping countries with shared interests and/or regionally, such as the Quad, can create more buy-in for these policies than acting bilaterally.
Conclusion
Through strong, durable relationships with foreign partners, the United States can leverage trade, security, and development assistance to decrease global oil and gas demand. This requires future U.S. leadership to move quickly by shoring up partners whose relationships with the United States have strained under the adversarial and isolationist actions of the Trump administration. This will also require the United States to reengage collaboratively in multilateral forums to indicate to the rest of the world that it is a credible partner again. Doing so would yield significant benefits at home through more affordable, reliable, and secure energy for Americans, while also limiting the risks of dangerous climate impacts. With energy costs and global temperatures on the rise, Americans need leaders who will prioritize their needs and deliver these results.
Acknowledgments
The author would like to thank Trevor Higgins, Frances Colón, Shannon Baker-Branstetter, Ryan Mulholland, Mike Williams, Allison McManus, Kalina Gibson, Robert Benson, Tom Ellison, Romi Bhatia, Trevor Sutton, Alex Stapleton, Kate Larsen, Mahmoud Mobir, and Alfredo Rivera for their contributions to this analysis. Special thanks to Jasia Smith and Cathleen Kelly for their fact-checking.