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"Oil Investment Must Rise To $525 Billion PER YEAR To Avoid Supply Crunch" by Tsvetana Paraskova as seen on Zero Hedge

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This is significant.  We have all seen the many articles which show how investment dollars are not going into the oil and gas industry.  In fact, it is being discouraged on many fronts.

https://oilprice.com/Energy/Crude-Oil/Oil-Investment-Must-Rise-To-525-Billion-Per-Year-To-Avoid-Supply-Crunch.html

https://www.zerohedge.com/commodities/oil-investment-must-rise-525-billion-year-avoid-supply-crunch

Oil Investment Must Rise To $525 Billion Per Year To Avoid Supply Crunch

Tyler Durden's Photo
by Tyler Durden
Friday, Dec 10, 2021 - 11:15 AM

By Tsvetana Paraskova of OilPrice.com,

Upstream oil and gas investment must rise to the pre-pandemic levels of around $525 billion per year through the end of the decade so that the industry can ensure a demand-supply balance, Saudi Arabia-based International Energy Forum (IEF) and IHS Markit said in a new report this week.

supply%20crunch%20oil.jpg?itok=iedeAyOB

Oil Investment Must Rise To $525 Billion Per Year To Avoid Supply Crunch

By Tsvetana Paraskova - Dec 08, 2021, 1:00 PM CST
  • Investments in oil and gas exploration and production continue to be depressed
  • Moody's: Global annual upstream spending needs to increase by as much as 54 percent to $542 billion if the oil market is to avert the next supply shortage shock

Upstream oil and gas investment must rise to the pre-pandemic levels of around $525 billion per year through the end of the decade so that the industry can ensure a demand-supply balance, Saudi Arabia-based International Energy Forum (IEF) and IHS Markit said in a new report this week.

This year, upstream investment is still depressed, for a second year in a row, and is estimated at around $341 billion. This is almost 25 percent below the investment levels of the last “normal” year in 2019, says the report from IHS Markit and IEF, which is the world’s largest international organization of energy ministers from 71 countries including both producing and consuming nations.

While investments in oil and gas exploration and production continue to be depressed, global demand is “now near pre-pandemic highs and will continue to rise for the next several years, particularly in developing countries,” according to the report titled “Investment Crisis Threatens Energy Security.”

The next two years will be critical for the sanctioning of new projects to make sure that there is enough supply coming online within five to six years, the report noted.

“Insufficient upstream investment would result in more price volatility and spur adverse economic consequences,” IHS Markit and IEF say.

The report echoes the concern of many industry professionals, who have said in recent months that underinvestment in oil and gas threatens future energy supply because oil and gas will be consumed for decades to come, regardless of the pace of the energy transition.

A rushed transition into renewable energy would cause spiraling inflation and social unrest, Amin Nasser, the chief executive of Saudi Aramco, warned at the World Petroleum Congress in Texas this week, noting that investments in oil and gas needed to continue in order to avoid such a scenario.

Global annual upstream spending needs to increase by as much as 54 percent to $542 billion if the oil market is to avert the next supply shortage shock, Moody’s said in October.

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:

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(edited)

Well demand will increase at least to 2035

Investments in oil industry were halved affter 2014

Average time of puting new oil deposit to production is about 7 years frame

We had also record low new oil discoveries after 2014

Hedge funds and banks dont want to invest in oil thanks to GREEN DEAL or rather GREEN HISTERIA

What could go wrong in next few years at least untill 2025?

We are already 5 % below average OECD inventories in December 2021.

We already have record inflation in OECD countries (39 year high in USA November 2021)

It looks like perfect storm coming.

Some people predicted that in XXI centrury we will have war for water supply?

So why not global conflicts for energy supply?

Edited by Tomasz
  • Great Response! 1

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https://www.zerohedge.com/energy/world-economy-entering-period-oil-scarcity-halliburton-ceo-says

World Economy Entering Period Of Oil Scarcity, Halliburton CEO Says

Tyler Durden's Photo
by Tyler Durden
Friday, Dec 10, 2021 - 07:00 PM

Authored by Nicholas Dolinger via The Epoch Times,

Halliburton CEO and president Jeff Miller made waves this week by predicting that the world is due for a period of oil scarcity in comments at the World Petroleum Congress in Houston, Texas.

“I think that for the first time in a long time, we will see a buyer looking for a barrel of oil, as opposed to a barrel of oil looking for a buyer,” Miller said.

Since 2014, the oil industry has generally deemphasized building new infrastructure in the face of low prices. However, that trend may now catch up with the industry, which now finds demand for oil exceeding the available supply given current infrastructure.

global-oil-700x420.jpg?itok=-X4ICE-o

Some analysts have speculated that it is increasingly likely that oil prices will soon climb to $100 per barrel, a price unseen in the past seven years and which has serious potential to disrupt the economy.

An additional factor contributing to predicted oil scarcity is a labor shortage in the fossil fuel industry surpassing that in the general economy.

The widespread perception that fossil fuels will be marginalized in the future of energy and transportation makes long-term careers in petroleum unattractive to young workers, with many oil workers seeking to switch to renewables or leave the energy industry outright.

A recent survey revealed that 43 percent of oil industry employees sought to transition to other sectors in the next five yearsas reported by Reuters.

As baby boomer employees retire, the industry struggles to replace them with young workers, who see the oil industry as unfavorable to long-term careers because of concerns about climate change models, and pressure by politicians, environmentalists, and investors to transition to renewable energy sources.

This combination of infrastructural underinvestment and labor shortages is likely to result in an oil supply stretched thin to meet demand, resulting in higher prices and possible shortages.

With oil extraction occurring at a significant time lag from industry investment and the skill shortage in the labor industry showing no signs of abating, there are major reasons to believe that any scarcity in oil supplies could last long into the future.

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