Role of energy prices 2025 and outlook in aluminium’s next 25 years, considering three likely distinct scenarios

Call it destiny or plain arithmetic, aluminium’s decarbonisation story now hinges on energy prices. The Hall-Héroult smelting process is evidently electricity-intensive, so swings in oil, gas, coal and (crucially) electricity prices feed directly into producers’ margins, and definitely into the calculus for switching smelters to renewables or cleaner fuels.

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Starting with the numbers

The IEA’s World Energy Outlook provides the baseline price paths used by markets and planners. Crude oil averaged about USD 79 per barrel in 2024, and under the IEA scenarios, oil will range roughly between USD 33-106 per barrel by 2035, depending on the policy pathway (Stated Policies Scenario vs Current Policies Scenario vs Net Zero Emissions).

Natural gas shows stark regional spreads in the WEO benchmark table. For 2024, the US Henry Hub equivalent is USD 2.2 per million British thermal units (MMBtu) versus USD 10-13 per MMBtu in Europe/Japan.

And the IEA projects those regional patterns to persist under different scenarios. Steam-coal import prices also diverge heavily by market (coastal China, EU, Japan). These calibrated scenario numbers come straight from the World Energy Outlook’s prices section.