Oil Market Will Face Supply Shortage by End of 2025

• Occidental CEO Vicki Hollub warns that the oil market is heading towards a supply shortage by the end of 2025 due to the world's failure to replace current crude reserves rapidly enough.
• Hollub notes that about 97% of today's oil was discovered in the 20th century, and the world has replaced less than 50% of the crude produced over the last decade, indicating a significant gap in replacing depleted reserves.
• Despite the ongoing conflicts in the Middle East, Hollub points out that the oil market is presently oversupplied, keeping prices down. Countries like the U.S., Brazil, Canada, and Guyana have been pumping record amounts of oil amid a slowing demand in China.
• Hollub acknowledges the current market imbalance as a short-term demand issue, she emphasizes that it will transform into a long-term supply problem in the coming years, with the supply and demand outlook flipping by the end of 2025.
• OPEC predicts global oil demand to grow by 1.8 million barrels per day in 2025, outpacing production growth outside the cartel. This forecast suggests a potential supply deficit unless OPEC adjusts its production cuts. Despite lower prices in 2023, Hollub expects a rebound, with Occidental projecting WTI to average around $80 in 2024.

(Source: CNBC)