Occidental Petroleum CEO warns: Global oil shortage expected next year
Occidental Petroleum CEO stated that during the second half of the 20th century, the discovered crude oil reserves by oil companies were approximately five times the global demand. However, in recent decades, this ratio has significantly decreased and is currently around 25%.
Is an oil supply crisis imminent?
According to media reports, Vicki Hollub, CEO of a Western oil company, stated at the Davos Forum on Tuesday that due to exploration activities lagging behind demand growth, there will be a global shortage of oil starting from 2025.
Hollub stated that for most of the second half of the 20th century, the oil reserves discovered by oil companies were about 5 times the global demand. However, this ratio has significantly decreased in recent decades and is currently around 25%.
"In the short term, the oil market is also imbalanced, but tends to be oversupplied," Hollub said. "Supply-demand imbalance may continue to exist after 2025, but by then the global oil market will shift from short-term oversupply to long-term supply shortage."
Hollub has been warning that with the decline of old oil fields, the world needs new resources, new investments, and new production capacity to maintain the current supply level.
For years, Saudi Arabia, the world's largest oil exporter, and its state-owned oil giant Saudi Aramco have also issued similar warnings.
Saudi Arabia and Saudi Aramco have repeatedly stated that the focus of the energy industry and the energy transition debate should be on reducing emissions, rather than reducing oil and gas production.
Amin Nasser, CEO of Saudi Aramco, stated in an interview at the Davos Forum on January 17th according to Wall Street CN that he expects the oil market to face supply tightness as consumers have consumed 400 million barrels of inventory in the past two years, while oil demand continues to grow, and OPEC's remaining production capacity will be the main source of additional supply.
He also believes that the ongoing crisis in the Red Sea shipping will pose challenges to oil transportation, exacerbating supply tightness:
"In the short term, tankers may be able to be used... In the long term, more tankers will be needed, and these tankers will require longer voyages."
In October last year, Nasser stated at the Energy Summit that the company is studying renewable energy, e-fuels, hydrogen, and carbon capture and storage. However, he added that in the coming decades, the world will still need oil and gas, as renewable energy cannot yet meet human needs.