Coronavirus: Global Oil Supply to Shrink 6 Percent by 2030

Global oil supplies may be 6 percent less than expected by 2030 because of delays to investments by energy companies in response to falling crude prices due to the coronavirus crisis, data from energy analysts at Rystad showed.

Oil and gas companies across the world have slashed investment budgets, exiting projects or delaying bringing them onstream to counter a fall in crude prices to record lows due to a supply glut as the coronavirus outbreak destroyed demand.

Delayed final investment decisions (FID) for projects which take years to come on stream are already expected to shrink global supply of oil and gas by 5.6 percent by 2025, with the majority of the revisions coming from shale oil, mostly found in the United States, Rystad said.

All this leaves the global oil and gas supply on track to drop off by 6.3 percent by 2030 compared with what was expected before the price crash, the Rystad data showed.

It estimates that $195 billion worth of non-shale projects are being delayed, most of which are gas and gas condensate field developments. Geographically the biggest slump is in the Middle East in that group.

Excluding the North American shale sector, energy analysts at Wood Mackenzie (Woodmac) reckon only about 10-15 large upstream projects have a “reasonable chance” of receiving a final investment green light this year, a level last seen during the post-2014 oil price crash.

That compares with around 50 projects tapping reserves of over 50 million barrels of oil equivalent each which had been pencilled in for a final investment decision this year before oil prices plummeted, according to Woodmac.

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