ALEXANDRIA, Va.—“2022 taught us that too much focus on the decarbonization agenda led to a mismatch between supply and demand,” said bp’s chief U.S. economist Michael Cohen.

“Efforts by the European Union, UK and U.S. to reduce reliance on Russian oil and gas following the invasion of Ukraine laid bare the lack of affordable energy alternatives. U.S. President Joe Biden implored producers to pump more oil to bring down surging prices while countries like Germany burned more coal,” Bloomberg reports.

Oil consumption is heading for a record this year, according to the International Energy Agency, with China and demand for jet fuel driving much of the growth. Supply hasn’t kept pace. While bp remains heavily invested in other forms of energy, it has scaled back its withdrawal from oil. It estimates that oil will need investments of more than $400 billion a year until 2050.

Earlier this month, bp CEO Bernard Looney defended his company’s ongoing investment in oil and gas, saying, “Reducing supply without also reducing demand inevitably leads to price spikes, price spikes lead to economic volatility, and there’s a risk that volatility will undermine popular support for the transition. We avoid that outcome by investing in today’s energy system, as well as investing in the transition.”

Auto executives are also grappling with the timing of switching from internal combustion to electric vehicles. Currently automakers use the profits from the sales of their gasoline-powered vehicles to fund their EV rollouts, which, in general, are not profitable. That creates a difficult timeline, since automakers must simultaneously ramp up their EV offerings and continue producing their profit-making, gasoline-powered vehicles.