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The oil market could be heading for a supply crunch from 2025 onwards as oil exploration fails to keep pace with demand, Occidental Petroleum Chief Executive Vicki Hollub said on Tuesday.

Hollub, who spoke on the sidelines of the World Economic Forum in Davos, said U.S. WTI crude prices could trade in the $80-$85 a barrel range from 2025. Prices averaged about $78 a barrel last year.
"In the near term, the markets are not balanced; supply, demand is not balanced," Hollub said, adding that: "2025 and beyond is when the world is going to be short of oil".

Hollub said that from the mid-1950s to the late 1970s, oil companies were finding around five times as much oil as was used, a ratio that has steadily declined to about 25% in 2023.

She said that from 2012, U.S. oil companies moved away from exploration and focused on tapping shale oil reserves, which have a much shorter lifespan than conventionally produced oil. She added that she expected energy transition scenarios will have to be adjusted to accommodate for more oil exploration.

https://www.reuters.com/business/energy/market-be-...

Hollub said that from the mid-1950s to the late 1970s, oil companies were finding around five times as much oil as was used, a ratio that has steadily declined to about 25% in 2023.

The current world oil reserve is 50 plus years of current production. To me there seems no need to find more oil. Produce existing reserves, yes, finding new oil, better to send the money to the stock holders.

Craig

I have a hard time seeing a severe shortage. The Permian Basin alone is producing about 40% of the US production. New wells in the Permian Basin are only recovering 9-11% of the oil in place. We will get better. Just a few percent of improved recovery will make a big difference, so much that I see it easier to step up production through better reservoir engineering than increased exploration (where I spent my career). Price is a big factor. Current production is from locations in which with current technology they make a profit down to around $40/barrel. If there is confidence of sustained $80 prices, the number of viable drilling locations soars. Above $100 long term, we could go into a glut, all without opening up new discoveries.

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