New Year. New Resolutions for Improved Security and Value Creation Through Lower Flaring

On behalf of all my colleagues at Capterio, I would like to wish you and yours a very Happy New Year!

2025 may be the first year global flaring stopped rising.  Our New Year summary shows why this matters to you by:

1. Previewing the main changes in flaring in 2025
2. Exploring the competitive implications of market oversupply
3. Identifying the key trends to watch in 2026

At Capterio, we help companies and governments to reduce flaring, capture value, improve competitiveness, boost energy security and reduce emissions. 

To date, we have helped our clients remove the equivalent of 4 million cars from the roads. We look forward to working with you accelerate action in 2026

Unprecedented Uncertainty

As energy markets enter 2026 marked by volatility and looming oversupply, reducing gas flaring is emerging as a rare opportunity to improve energy security, create value, strengthen competitiveness and meet tightening regulations. Despite rising global flaring, proven investable solutions already exist – and are delivering.  Flaring reduction is therefore rapidly becoming a core operational and commercial priority.

Global uncertainty is at unprecedented levels. Energy markets were highly volatile throughout 2025, shaped by geopolitics and renewed resource nationalism, with renewed disruption in the last days and weeks evident in several petrostates, including Venezuela, Nigeria and Iran. 

While the United States’ withdrawal from the Paris Agreement was an expected disappointment, public debate has clearly shifted away from the sustainability apex of 2015 toward security and affordability, often framed as requiring “energy pragmatism” or needing “all of the above” energy sourcing strategies.

Renewable deployment continues to grow exponentially and, as deployment outpaces growth in useful energy demand, the energy transition remains inevitable. The challenge is not direction, but pace.

Gas flaring reduction: a proven pathway to value from waste

Against a challenging global backdrop, gas flaring stands out as a rare opportunity that meets the moment.  Reducing gas flaring is one of the few areas where operators can simultaneously create value, improve energy security, reduce emissions and strengthen competitiveness and flexibility.

Globally, some 150 billion cubic metres of gas are flared each year.  That’s 4% of total gas production, close to $30 billion of lost potential revenue and over 1 billion CO2-equivalent tonnes of greenhouse gas emissions. It’s also equivalent to 100 GW of continuous power generation, enough to power 1,000 large data centres, or to meet the UK’s domestic electricity demand nine times over.

Flaring is dominated by the Middle East and Africa – or on a country basis, by a limited set that includes Algeria, Iran, Iraq, Libya, Mexico, Nigeria, Russia, the United States and Venezuela (see chart).

Figure: volume of gas flaring in 2025 by country and by region.  Flaring is notably very high in some of today’s more challenging countries, including Russia, Iran and Venezuela.  Source: Capterio FlareIntel’s platform.

Despite decades of ambition and commitments, global flaring increased in 2024 (according to the World Bank) and eliminating “routine” flaring by 2030 looks very challenging (see our analysis “Unpicking Flaring’s Alarming Increase”).  Results just out from Capterio’s real-time FlareIntel analytics platform shows that flaring was broadly stable in 2025 for the first time in several years. Increases in Iraq, Libya, Mexico and Russia were offset by reductions in Iran and the United States.  The figure below shows the flared volumes by country, grouped into those that in 2025 increased, remained stable and decreased.

Figure: size of gas flaring in 2025 by country, grouped into countries with increases above 0.5 BCM (red), significant decreases above 0.5 BCM (green) and broadly stable (grey).  Source: Capterio FlareIntel.

These global and country aggregates, however, mask important progress that is happening at both company and asset levels. Indeed, the good news is that a large fraction of flared gas can be addressed today using proven, commercially viable technologies that also deliver attractive investor returns. We know this because it is already happening – and we measure it with Capterio’s award-winning flare tracking platform, FlareIntel, which tracks every flare, at every asset, for every company, in every country – every day. 

Our July paper, “Igniting Action to Reduce Gas Flaring: Real Opportunities, Real Projects, Real Results” (with co-authors from Columbia University), showcases successful flare capture projects in countries as diverse as Algeria, Angola, Argentina, Egypt, Federal Iraq, and Kurdistan. Similar opportunities exist in many other countries, as we profiled in a series of presentations featuring many members of the Oil and Gas Decarbonisation Charter and the Oil and Gas Climate Initiative.

But to materially accelerate progress, the oil and gas ecosystem needs greater collaboration – including from operators, national oil companies, governments, service providers, financiers and NGOs and more.  Indeed, as we argue in our “Reframing Responsibility” paper, progress depends on identifying and overcoming barriers through constructive and creative problem-solving. Investors have a particularly important role to play too, both in unlocking capital and in acting as stewards of industry performance, as we explore in our paper “The Investor Advantage”.  We were delighted to present the ideas in these papers to Climate Action 100+ partners, several investment banks, and at a special hearing in the UK’s House of Commons.

How talk of gluts may accelerate flaring reduction

Most analysts are talking about the impending supply gluts. In oil, production growth from the United States, Brazil, Canada, Argentina, Guyana (and possibly Venezuela soon) and elsewhere is reshaping global balances and pushing prices to multi-year lows. In gas, an export-led LNG surge of nearly 300 BCM is underway, primarily from the United States and Qatar, with support from Canada and Australia. Prices of $5 per mmbtu, unthinkable recently, may be on the cards.

While this is good news for consumers through lower prices, it has another important consequence: intensifying competition. In an increasingly crowded market, the carbon intensity of the barrel or cubic metre will become a key metric for buyers, regulators and financiers alike.

Reducing flaring, therefore, directly strengthens producers’ competitiveness. Companies that cut their scope 1 and 2 emissions can protect market access, add flexibility, comply with tightening methane regulations, particularly in the EU (with the UK and Asia likely to follow), and avoid penalties at home and abroad. Capterio’s global LNG performance benchmarking paper identifies which producers on the right side of the cost-carbon curve are likely to secure disproportionate access to premium markets. In parallel, our real-time analytics provide actionable market intelligence, identifying operational disruptions at liquefaction and regasification terminals as they occur and revealing trading opportunities arising from interruptions in LNG imports and exports.

Figure: relative flaring performance of LNG liquefaction plants in 2024 from Capterio’s global benchmarking study published in November 2025.  We note a wide range in the “flaring intensity” (flaring as a percentage of throughput) by country (and also by plant and by company).  Plants with low flaring intensities are likely to have more attractive, lower intensity, LNG – and hence attract greater market share and/or lower penalties if / when the EU’s methane performance standard becomes material.

Trends to watch in 2026

Looking ahead, we are closely monitoring several developments related to gas flaring. In many cases, changes in flaring can be a leading indicator of change (and one reason our clients use FlareIntel).

• Venezuela: Despite holding the world’s largest (but complex) proven oil reserves, Venezuela accounts for only around 1% of global oil production.  But this production has an exceptionally high flaring intensity – five times the global average (250x higher than Norway), ranking fifth globally.
  
  Recent events have been tumultuous. In the very near term, oil production, and therefore flaring, is likely to decline, in part due to shortages of diluents required for ultra-heavy Orinoco crude. In the medium term, flaring is likely to rise as production is boosted through short-term interventions. However, material investment and any sustained, market-moving production growth will depend on the return of a stable legal and fiscal framework, access to billions of dollars of capital, and oil prices well above current levels (given the high cost and energy intensity of Venezuela’s heavy crude). These constraints are likely to make international supermajors more cautious than recent political rhetoric suggests. A potential near-term opportunity lies in connecting Venezuelan gas resources to Trinidad and Tobago’s under-utilised LNG export infrastructure, but there may be risks for neighbouring star producer Guyana.  Ultimately, progress will depend on the leadership and policy direction that emerges.
  
• United States: Lower oil prices and lower rig counts (which are down in the Permian by 19% vs 1 year ago) mean lower drilling and hence less associated gas production.  When coupled with new gas takeaway capacity coming onstream in 2026 (e.g., the Apex and Blackcomb pipelines) and surging demand for gas exports as LNG, we expect lower gas flaring in 2026. This reduction is despite a relaxation of the Biden-era regulations and the passing of the One Big Beautiful Bill Act. One to watch, however, is domestic power prices – they will be impacted by challenged gas supply and surging demand for AI and prioritised exports (see our piece “Gas exports, AI, …”.  And another: if Venezuela ramps up production, prices might lower, representing a potential own-goal for the administration. 
  
• Iraq: Several major gas capture projects have been delivered over the past 18 months, with further progress expected as international collaboration deepens (e.g., the new UK-Iraq partnership), although the pace will depend on the leadership and policy direction of the newly elected government. The temporary halt to Iranian gas imports in late December 2025, which reduced power generation by around 4 GW, was a clear reminder of the cost of continued flaring. Capturing Iraq’s flared gas could deliver more than 20 GW of reliable power, materially strengthen energy security, reduce reliance on imported gas (which may soon include LNG), and significantly cut emissions.
  
• Libya: Renewed rehabilitation efforts are underway, making Libya increasingly attractive for inward investment. Many international supermajors are returning or bolstering their positions, several re-entering high-flaring legacy oil fields. Increased oil production is inevitable, but new entrants will also need to address flaring to maintain their license to operate and retain access to EU markets.
  
• Algeria: As a top flaring country that has a critical role in supplying the EU, Algeria’s National Oil Company (Sonatrach) is right to renew efforts to unlock many material flaring reduction projects. As we presented at New York Climate Week, captured flared, vented and leaked gas could add $5 billion to national revenues, increasing export earnings by 19%. We hope to see reduction efforts bolstering domestic supply and international exports.
  
• EU: Focus through 2026 will be on the equivalence of MRV systems outside the EU. Third-country producers and exporters will need to demonstrate that their methane monitoring and reporting is credible, standardised and independently verified to gain market access. Our LNG operational performance benchmarking paper gives useful insight into where the biggest challenges lie.
  
• Methane. We expect continued progress on methane emissions from incomplete combustion, venting, and leakage (i.e., fugitives), driven by a convergence of standards (toward OGMP 2.0), strengthening regulations in some jurisdictions, stronger policy signals, and rapidly improving technologies, including increasingly capable satellite monitoring.  We should be clear-eyed, however. Where oil sites routinely flare, captured methane will often still be flared rather than utilised. At Capterio, we are increasingly working across the methane and flaring boundary, helping operators make robust, system-level decisions, even where the correct outcome is a short-term increase in flaring to deliver a net reduction in climate impact.
  
• AI: Insatiable demand for power for AI will continue.  We are seeing an increasing number of companies reaching out to Capterio to explore how flaring can meet their power needs.  We can expect to see a rise in flare to AI / cryptocurrency mining solutions to gas flaring, as we profiled in our Argentina paper.
  
• Asset restructuring and divestment: As the industry responds to lower oil prices and cost-cutting drives, we expect further restructuring, including divestments and carve-outs.  Some of these commercial moves will indirectly or directly influence flaring – either by lowering reporting visibility (shifting assets from “operated” to “non-operated”) and/or driving assets into the hands of operators with less public scrutiny (the so-called “transferred emissions” problem – see our paper with EDF).  

Capterio in 2025 – a year of continued acceleration

We are delighted to report continued growth and impact at Capterio. Since 2018, we have focused relentlessly on delivering practical, data-driven solutions to gas flaring that drive on-the-ground action.

FlareIntel is our unique climate tech platform that uses proprietary algorithms to process 1 terabyte of satellite data every day to track every flare for every asset, for every company, in every country.  Our platform integrates real-time cloud data (correcting for attenuation and blocking), visual imagery and rich “metadata” including license blocks, field outlines, pipelines, power lines, LNG terminal and more.

Figure: snapshot from FlareIntel for Libya, highlighting our rich basemaps which include license blocks, field outlines, pipelines, power lines and more.   

Powered by FlareIntel, we help companies and countries improve visibility, drive operational excellence, and identify and prioritise high-return investment opportunities. Beyond producers, we also work with governments, financiers, service companies, traders and more.

Over the past four years alone, our work with clients has helped reduce their gas flaring by the equivalent of removing four million cars from the road. Equally, we have helped companies to improve their operational performance by driving down “upset” flaring and improving equipment performance and reliability.  Looking ahead to 2026, you can expect announcements of several strategic partnerships that will expand our analytics capabilities and further strengthen our service offering.

But for now, we would like to thank all our clients, collaborators, investors, finance partners and academic partners for your continued trust and support.

We look forward to working with you in the year ahead. With best wishes for 2026,

Mark
CEO, Capterio

If you would like to learn more about how Capterio can help you reduce flaring, create value and accelerate the energy transition, please contact us at ceo@capterio.com, or visit www.capterio.com.

Figure: An alternative view of global gas flaring by country in 2025. Countries are grouped into high (red), medium (yellow) and low (green) categories based on the World Bank’s Governance Index, which covers government effectiveness, regulatory quality, rule of law and control of corruption. The concentration of around 70% of total flared volumes in a small number of countries, including Iran, Russia, Iraq, Venezuela and Libya, is striking. This concentration underlines the need for a focused and collaborative international effort if material reductions in global flaring are to be achieved.  2025 flaring data are from Capterio’s FlareIntel platform. Governance data are from the World Bank World Governance Index (2024).