KUALA LUMPUR: Asia is set to deepen its reliance on offshore energy and regional supply chains as geopolitical tensions and rising demand reshape global energy dynamics, according to Rystad Energy.
Its CEO Jarand Rystad said the region can increasingly depend on its own resources and capabilities, particularly as disruptions in the Middle East expose vulnerabilities in global energy supply.
“The main message is that you can rely more on Asia than you can on the Middle East,” he said at the Offshore Technology Conference Asia 2026 today, where the firm unveiled its latest white paper on offshore energy.
The shift comes as Asia Pacific offshore energy investment is projected to average about US$150 billion (RM710 billion) annually through 2035, supporting both oil and gas development and the expansion of low-carbon technologies such as offshore wind, carbon capture and storage (CCS) and floating solar.
Rystad noted that global energy demand is expected to rise about 15% over the next 15 years, requiring total investments to exceed US$5 trillion annually by 2045 to stay aligned with climate goals.
Within this, Asia will remain the primary driver of demand growth, accounting for the fastest expansion in power consumption globally.
Despite the transition push, oil and gas will continue to play a critical role.
Rystad said oil demand is expected to peak in the early 2030s, while gas could peak later in the decade, underscoring the need for continued upstream investment.
The urgency has been amplified by ongoing tensions in the Middle East, which have injected volatility into global energy markets.
Rystad said its base case assumes a ceasefire in early April, with oil prices remaining elevated in the second quarter before easing towards US$80 per barrel later in the year.
However, a prolonged escalation could trigger severe supply disruptions.
“In a worst-case scenario, prices could go extremely high, even up to US$200 per barrel, because you would need demand destruction on a scale similar to Covid-19,” he said.
Such uncertainty is already prompting a renewed push to sanction oil and gas projects, particularly in regions like Asia, where exploration activity is picking up again.
Rystad estimates that around 1,200 new offshore fields will need to be developed globally to meet future demand, with Southeast Asia emerging as a key frontier despite complex geology.
At the same time, Asia’s role as a major energy importer continues to shape market dynamics.
While the region is expected to drive the strongest growth in gas demand, there are also risks of oversupply in the 2030s as new projects come online globally.
Rystad said this could eventually create a more favourable environment for buyers, even though current market conditions remain tight due to supply disruptions.
Alongside conventional energy, offshore clean energy is gaining traction, although at a slower pace than previously expected.
Offshore wind capacity forecasts have been revised down compared with earlier projections, reflecting higher costs, interest rates and policy challenges.
Still, the sector remains a key growth area, with global offshore wind investments expected to reach around US$100 billion annually by 2030, driven largely by Asia and Europe.
Beyond generation, Asia is increasingly dominating global energy supply chains, particularly in manufacturing.
The region leads in key segments such as solar panels, battery cells, wind turbine components and offshore vessels, positioning it as a critical enabler of the global energy transition.
China alone accounts for a significant share of production across these segments, while countries like Indonesia and Malaysia are expanding their capabilities.
Rystad also highlighted the growing importance of emerging technologies in Asia’s energy mix, including floating solar, small modular nuclear reactors and CCS projects, many of which are now moving towards final investment decisions.
In parallel, regional cooperation on power grids is expected to strengthen energy resilience.
Cross-border interconnections could help balance supply and demand across different weather systems and time zones, reducing reliance on single energy sources.
“Asia is entering a pivotal period in its energy journey,” Rystad said. “It’s really an all-of-the-above strategy that will define the next decades.”
