Just as the world was starting to consider the global energy crisis as something to be seen in the rear-view mirror, the Russian paramilitary organization Wagner Group began an armed insurrection in Russia on 24 June. This is reflective of just how profoundly energy markets can be affected by everything from geopolitics to weather and outages.

Having endured significant fluctuations in energy prices over the past year, the high-stakes showdown in Russia could easily have caused another spike in oil prices. No such spike materialized as the dangerous conflict was averted in the eleventh hour, but there’s no denying that the level of geopolitical risk has been cranked up by this dramatic turn of events – further evidence of the uncertain waters we are navigating through the energy transition.

Here at the midway point of 2023, we have seen many promising developments even amid market turbulence. Many countries have been introducing policies to stimulate further investments in renewable energy projects and technologies. Strong voices are flagging serious concerns about access to vital materials and metals. Lately, I have shared with large audiences the concept of ‘cleaner and leaner’, arguing that lower volumes of key materials – not the opposite – will be needed in the future energy system. There is no doubt that driving the energy transition and the accelerated growth of renewables will require a steep rise in consumption of elements such as lithium, graphite, silver and rare earth materials. However, our analysis shows that consumption of these materials will likely grow to about 20 million tonnes by 2050, but this growth will be dwarfed by the vast reduction of demand for fossil fuels. In our 1.6 degree scenario, more than 10 billion tonnes of fossil molecules will be removed from the market. By gradually moving away from fossil fuels, the wider energy system will evolve. Instead of transporting ore to where the energy is, developers will move the renewable energy to where the ore is. The net effect of these changes will be a significantly reduced need for logistics to support operations.

Hence, we will likely see demand for shipping and logistics reach a peak within a decade before subsiding to more sustainable levels. To exemplify the lean future, consider the size and capabilities of devices made 30 years ago, such as a camera or a piece of machinery, and compare them with such devices made today. There is no doubt that the world is constantly moving from bulk to lean.

In Rystad Energy, we will also take a bit of a break during the summer season, without losing sight of key events and movements in the many markets that we cover. By sharing our latest data and insights, we will do our best to help you navigate through a complex landscape and guide you towards optimal decisions. We are thrilled to invite you back to our flagship event, the Rystad Energy Week, consisting of two global digital events and three in-person summits, hosted in Singapore, London and Houston. We sincerely hope you will be able to join us for one or more of our events as we discuss how best to navigate the future of energy.