Oil and gas in the AI era

Constantly changing market conditions and volatility have always characterized the global oil and gas industry. Today, two transformative forces are converging to reshape the business including the rapid evolution of artificial intelligence (AI) and the shift to more sustainable, secure, and affordable energy sources. Success will belong to the organizations that tap the synergy between these forces to accelerate operational efficiencies, innovate business models for growth, and build agility in response to evolving markets.

A new IBM Institute for Business Value (IBM IBV) survey shows that leaders of oil and gas companies understand these dynamics and the role of AI in their transformation strategy. That’s why 59% expect AI to contribute significantly to their revenue within three years and why 75% say that AI investments will deliver a measurable competitive advantage in this same timeframe.

Leveraging AI marks a fundamental shift in how oil and gas companies can gain an edge but requires a balance between investments in productivity and innovation.

Enabling new business models in a changing energy landscape

AI applications are reshaping the role of oil and gas companies in a decarbonized energy landscape. From optimizing renewable energy generation to managing distributed energy resources and market integration, AI enables the agility, intelligence, and data analytics advancements needed to lead in new energy business models.

More than half (56%) of executives say AI will enable new technology capabilities that fundamentally transform their business model, and 70% agree it will improve their ability to navigate market disruptions, such as demand shifts, geopolitical instability, and the emergence of green hydrogen and other lower emission alternative fuels and products.

Targeting operational efficiency with AI tools

AI technologies are already delivering business outcomes with 64% of executives saying they are significantly revamping workflows to enhance process efficiencies and reduce manual effort. Initiatives include automating seismic data interpretation in upstream operations, using AI for real-time data and drilling optimization, enhancing predictive maintenance in midstream pipeline networks, and optimizing refinery yields in downstream operations.

As oil and gas companies optimize current operations and transition toward a low-carbon future, AI is emerging as a cutting-edge catalyst across the energy sector value chain. From identifying untapped reserves, to preventing equipment failure and downtime through predictive analytics and maintenance, to boosting production process efficiencies and demand forecasting, AI drives unprecedented outcomes and smarter, more agile operations and decision-making.

Adoption of AI use cases is growing rapidly across upstream, midstream, and downstream activities. Currently, 44% of upstream organizations use AI in oil and gas exploration. Another 45% plan to do so within three years. In downstream operations, 41% apply AI in refining; another 52% expect to do so in three years.

Oil and gas executives report a 27% improvement in production uptime—for example, through AI-based predictive equipment maintenance—and a 26% improvement in asset utilization optimization.

Using AI to gain advantage in a highly competitive industry

Streamlining processes is essential, but building a competitive edge lies in AI-driven business model disruption. Many oil and gas operations are positioning themselves to capitalize on these opportunities. 67% of executives say they are actively rearchitecting how they work to capture the full potential use of AI, and 58% report AI solutions can create significant value through new revenue streams—such as data-driven services, digital operations platforms, and AI-powered trading tools. These views pave the way for the oil and gas sector to not only optimize operations but also reimagine itself for the future.

Successful AI deployments lead to measurable returns, which fund further AI innovation—accelerating digital transformation without constantly seeking new capital.

The next frontier in industrial automation: Agentic AI

Autonomous agents can take real-time actions based on environmental feedback and transform how decisions are made and executed. In upstream operations, 29% of organizations are piloting agentic AI optimization, such as dynamically adjusting mud weight to prevent blowouts. In the midstream segment, 23% are testing AI agents in pipeline monitoring, leveraging sensor data and satellite imagery to proactively detect and resolve anomalies before they lead to critical equipment failures.

Download the report to help your oil and gas industry clients capture the full potential of AI to optimize workflows, support sustainability, drive innovation, and reengineer entire business models.