CEO of Occidental Petroleum, a major holding of Warren Buffett: Crude oil supply will be "extremely scarce" in a few years
Vicki Hollub, CEO of Western Petroleum, a company heavily invested by Warren Buffett, stated that by the end of 2025, the oil market will face a supply shortage, and in a few years, the supply of oil will be extremely scarce. Approximately 97% of the oil currently being produced was discovered in the 20th century. In the past decade, less than 50% of the global crude oil production has been replenished.
On Monday, Vicki Hollub, CEO of Western Petroleum, a company heavily invested by Warren Buffett, stated that by the end of 2025, the oil market will face a supply shortage, and a few years later, the supply of oil will be extremely scarce.
Hollub explained that the reason for the supply shortage in the oil market by the end of 2025 is that the global crude oil reserves are not being replenished quickly enough. Approximately 97% of the oil currently being produced was discovered in the 20th century. In the past decade, less than 50% of the global oil production has been replenished. "The situation we are facing now is that our supply will be very scarce in a few years."
Hollub acknowledged that there is currently an oversupply in the crude oil market, with record-high oil production in the United States, Brazil, Canada, and Guyana. Therefore, despite conflicts in the Middle East, oil prices continue to decline.
However, Hollub expects a shift in the supply and demand outlook by the end of 2025. Hollub pointed out that the market is currently imbalanced, but this is a short-term demand issue. The future will present a long-term supply problem.
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. She previously stated that for most of the second half of the 20th century, the oil reserves discovered by oil companies were about five times the global demand. However, this ratio has significantly decreased in recent decades and is currently around 25%.
In December last year, Hollub stated that Western Petroleum expects the average price of WTI crude oil to be around $80 per barrel by 2024. On Monday, WTI March crude oil futures closed up $0.50, or 0.69%, at $72.78 per barrel. Brent April crude oil futures closed up $0.66, or 0.85%, at $77.99 per barrel.