In an industry where multi-billion capital commitments span thirty years, where the energy transition is real but its pace contested, and where no forecast reliably separates a stranded asset from a generational investment, the map is a dangerous comfort.

What the best energy leaders carry instead is a compass: a clear sense of direction, grounded in principles rather than predictions, that allows them to navigate across many possible futures rather than optimise for one. That distinction is easy to articulate and hard to live by.

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The problem with maps

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The industry faces a unique forecasting problem: today’s decisions will be tested by markets, policies, and technologies no one can credibly describe thirty years out. The temptation is to reach for the best available map: medium and long-term energy scenarios and in-house demand models. These are useful tools for reducing uncertainty, but they cannot eliminate it.

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In 2014, US shale collapsed oil prices within months of most forecasts missing it entirely. In 2020, a pandemic briefly sent futures negative. In 2022, a land war in Europe sent gas prices to records no scenario had placed in its base case. In 2026, the war between the US and Iran, and the resulting closure of the Strait of Hormuz, delivered what leading energy analysts have called the largest supply disruption in the history of the global oil market. The ubiquity of energy means its maps keep being redrawn.

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If the terrain cannot be reliably mapped, the leader's task is not to produce a better map. It is to build an organisation capable of travelling well regardless of what the terrain turns out to be.

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The divergence among oil majors over the past decade is instructive. Not because any one company got it right, but because radically different strategies each had their moment of looking prescient, and their moment of looking reckless.

One major’s refusal to pivot drew board-level revolts; by 2023 its discipline looked like conviction. Another major’s bold announced pivot toward renewables attracted applause; within two years financial returns and the energy crisis forced a quiet retreat. Those who divested early were either ahead of the curve or sellers of assets that continued generating strong returns as prices recovered. No strategy was consistently vindicated: each was, at different moments, both right and wrong, depending on the time horizon you chose to judge it.

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The strategies that held up best were not those built around a confident view of where demand was headed. They were built around the fundamental “first principles” of this industry: commitment to health and safety, capital discipline across a range of scenarios, portfolio resilience, and honest communication about uncertainty.

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The map-followers moved decisively toward a fixed destination and found the destination had moved. The compass-holders kept their bearing.

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The war in Iran brings this from the abstract into the present. Will the closure of the Strait of Hormuz reshape the energy paradigm – extending the life of hydrocarbons as importers scramble to diversify away from single points of failure – or will it accelerate decarbonisation, as the price of dependence is judged intolerable? Governments are drawing opposite conclusions from the same event. No one can predict which reading the next decade will vindicate; one can only be positioned for both. The end goal is not certainty, but readiness.

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What a compass actually means

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A compass is not a vague aspiration. In practice, it means testing every major investment decision against a range of futures rather than a single forecast: does this allocation make sense if oil demand peaks in 2030? Does it survive if it peaks in 2040? Is it resilient to a carbon price shock, a technology surprise, a geopolitical rupture?

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It means preserving optionality. It is not a synonym for indecision, but a deliberate strategy in an environment where the cost of being wrong is asymmetric and often irreversible. Keeping options open is expensive - in forgone returns, slower commitments, and the frustration of those who want a decision now - but that cost is almost always smaller than the cost of bearing the brunt of a wrongful decision that cannot be undone. Choosing is the last thing a compass-leader does, not the first, and the organisation should never bet the bank on a single possible future. And it means anchoring strategy in what the organisation genuinely does well: generating returns from complex, capital-intensive operations that can fund the transition rather than pretend it has already arrived.

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In practice, this shows up in specific moments of refusal: declining to announce a 2050 net-zero target the business cannot honestly underwrite; holding oil-and-gas assets when shareholders demand a louder green pivot; committing transition capex when the CFO wants buybacks; admitting publicly that a previous strategy was wrong. These are the visible costs of compass-leadership: the moments when the organisation will look, from the outside, slow or indecisive. They are also the moments that separate conviction from fashion.

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The harder problem: Leading people without a destination

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Strategy is the easier half of this challenge. The harder half is human: boards demand targets, investors want roadmaps, employees need enough certainty to make decisions and enough purpose to stay committed. The pressure to produce a map, even a fictional one, is enormous and relentless. Resisting it while still providing coherent direction is perhaps the defining test of energy leadership today.

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What compass-leaders offer instead is not certainty about the destination but confidence in the organisation's ability to navigate. They communicate direction clearly - the transition is real, capital discipline is non-negotiable, legacy cash flows fund the future rather than substitute for it - while being honest that the route will be adapted as conditions change. This requires a tolerance for ambiguity that is genuinely uncommon, and a willingness to be misread as indecisive by those who mistake confidence for certainty. It also requires consistency: a compass is only useful if the principles it encodes are stable even when the external landscape is not.

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There is a particular pressure on energy executives to project certainty they cannot honestly possess. The courage this industry demands is not the courage to pick a bold prediction and defend it. It is the courage to say: we know the direction, we understand the forces acting on us, and we have built an organisation capable of navigating toward a future we cannot fully see. In an industry where the terrain keeps changing, that is not a counsel of humility. It is the only kind of leadership that holds.

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Hugo Liabeuf
Programme Manager, Oil and Gas Climate Initiative (OGCI)

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