Global Banks Hike Fossil Fuel Funding to $906B as Energy Crisis Strains Asia

Global bank financing for fossil fuel companies rose for a second consecutive year in 2025, reaching $906 billion, according to a report from campaigners coordinated by Rainforest Action Network. The 8% increase from 2024 signals a continued flow of capital into the sector amid climate policy rollbacks, particularly at U.S. and Japanese banks.

U.S. banks led the expansion, with their share of global fossil fuel financing rising to 32% last year from 28% in 2021. JPMorgan Chase remained the world's top financier, committing $58.2 billion in 2025, a 12.5% annual increase. Bank of America ranked second at $47 billion. Since the 2015 Paris Agreement, the world's 65 largest banks have provided a combined $8.7 trillion to fossil fuel operations.

The sustained financial backing comes as a major energy supply crisis unfolds. The closure of the Strait of Hormuz due to war has cut an estimated 15 million barrels per day in output, creating a "third oil shock," according to former International Energy Agency chief Nobuo Tanaka. Asia, which imports about 60% of its crude from the Middle East, is at the center of the crisis.

India, the world's third-largest crude importer, is scrambling to contain the economic damage. With oil prices approximately $30 per barrel above pre-war levels, the country faces diminished growth prospects, currency weakness, and inflationary pressures. India imports more than 85% of its oil and is now seeking record volumes from Russia, Venezuela, and Brazil to offset lost Middle Eastern supply.

Analysts at Indian firm 360 ONE Capital warn that if oil averages $90 per barrel, India's inflation could accelerate to 4.8% in fiscal year 2027. A further $10 per barrel increase could push inflation to 5.6% and lower GDP growth by an additional 40 basis points. The Reserve Bank of India has acknowledged near-term downside risks to growth from the oil price surge.

The supply disruption has hit key Asian suppliers hard. Iraq's crude production has plunged from over 4 million barrels per day to just 1.4 million, with April exports falling to 10 million barrels from 93 million before the conflict. Former IEA chief Tanaka suggested the crisis may accelerate global electrification efforts to reduce dependence on imported oil.

For Bakken operators, the report on bank financing indicates capital remains accessible for fossil fuel development despite global policy shifts. Meanwhile, the severe supply disruption underscores the strategic value of stable, non-OPEC production from regions like the Williston Basin, as major importers seek diversified supply sources.