BP and Statoil have canceled contracts to sell power from large offshore wind projects to New York state, a sign that high costs will continue to plague the industry. But it’s not all doom and gloom. However, the atmosphere in the Middle East, a key supplier of oil and natural gas to the world, remains grim. Here’s a closer look at five emerging trends in the energy industry in the year ahead.
1. Oil prices should remain stable despite volatility
The oil market has had an ups and downs start in 2024. Brent crude settled at $78.25 a barrel, jumping more than $2. The bombings in Iran highlight ongoing tensions in the Middle East. Ongoing geopolitical uncertainty – particularly the potential for an escalation in the conflict between Israel and Hamas – means volatility in crude oil prices will persist, but most analysts believe bearish fundamentals will limit price gains.

On top of that is lackluster global economic data. U.S. oil production was unexpectedly strong, helping to keep prices in check. Meanwhile, infighting within OPEC+, such as Angola’s withdrawal from the group last month, has raised questions about its ability to maintain oil prices through production cuts.
The U.S. Energy Information Administration projects oil prices to average about $83 per barrel in 2024.
2. There may be more room for M&A activities
A series of huge oil and gas deals followed in 2023: Exxon Mobil and Pioneer Natural Resources for $60 billion, Chevron and Hess for $53 billion, Occidental Petroleum and Krone- Rock’s deal amounts to $12 billion.
Decreasing competition for resources – especially in the highly productive Permian Basin – means more deals are likely to be struck as companies look to lock down drilling resources. But with many large companies already taking action, deal sizes in 2024 are likely to be smaller.
Among America’s big companies, ConocoPhillips has yet to join the party. Rumors are rife that Shell and BP could strike an “industry-seismic” merger, but new Shell CEO Vail Savant insists major acquisitions are not a priority between now and 2025.
3. Despite the difficulties, renewable energy construction will continue
High borrowing costs, high raw material prices and permitting challenges will hit the renewable energy industry in 2024, but project deployment will continue to set records.
According to the International Energy Agency’s June 2023 forecast, more than 460 GW of renewable energy projects are expected to be installed globally in 2024, a record high. The U.S. Energy Information Administration predicts that wind and solar power generation will exceed coal-fired power generation for the first time in 2024.
Solar projects will drive global growth, with annual installed capacity expected to grow by 7%, while new capacity from onshore and offshore wind projects will be slightly lower than in 2023. According to the International Energy Agency, most new renewable energy projects will be deployed in China, and China is expected to account for 55% of the world’s total installed capacity of new renewable energy projects in 2024.
2024 is also considered the “make or break year” for clean hydrogen energy. At least nine countries have announced subsidy programs to boost production of the emerging fuel, according to S&P Global Commodities, but signs of rising costs and weak demand have left the industry uncertain.
4. The pace of U.S. industry return will accelerate
Since it was signed in 2022, the Inflation Reduction Act has prompted the United States to invest heavily in announcing new clean technology factories. But 2024 is the first time we’ll have clarity on how companies can access the lucrative tax credits said to be in the law, and whether construction of those announced plants will actually begin.
These are difficult times for American manufacturing. The manufacturing boom coincides with a tight labor market and high raw material costs. This could lead to factory delays and higher-than-expected capital expenditures. Whether the United States can step up the construction of clean technology factories at competitive costs will be a key issue in the implementation of the industrial return plan.
Deloitte Consulting predicts that 18 planned wind power component manufacturing plants will begin construction in 2024 as more cooperation among East Coast states and the federal government provide support for the construction of offshore wind power supply chains.
Deloitte says domestic U.S. solar module production capacity will triple this year and is on track to meet demand by the end of the decade. However, production in the upper reaches of the supply chain has been slow to catch up. The first U.S. manufacturing plants for solar cells, solar wafers and solar ingots are expected to come online later this year.
5. The United States will strengthen its dominance in the LNG field
According to preliminary estimates by analysts, the United States will surpass Qatar and Australia to become the world’s largest LNG producer in 2023. Bloomberg data shows that the United States exported more than 91 million tons of LNG throughout the year.
In 2024, the United States will strengthen its control over the LNG market. If all goes well, the U.S.’s current LNG production capacity of about 11.5 billion cubic feet per day will be increased by two new projects coming on stream in 2024: one in Texas and one in Louisiana. According to analysts at Clear View Energy Partners, three projects reach the critical final investment decision stage in 2023. As many as six more projects could be approved in 2024, with a combined capacity of 6 billion cubic feet per day.