Top executives from supermajors, the U.S. shale patch, and national oil companies remain bullish about the oil market in the medium and long term, expecting growing demand and the downturn in oil prices to eventually rebalance supply and demand from the looming glut.
At the Energy Intelligence Forum in London this week, the oil bosses acknowledged the bearish short-term fundamentals as supply growth outpaces the increase in demand. But they also see the market rebalancing in the medium term and supply struggling to catch up with demand in the long term.
Everyone concurs that there will be a glut in the short term; projections vary only about how big the oversupply will become later this year and early next year.
The International Energy Agency (IEA) this week warned, again, that soaring supply and “subdued” demand would bloat the oversupply to record levels.
Surging Middle East supply, combined with robust flows from the Americas, boosted oil on water in September by a massive 102 million barrels, equivalent to 3.4 million barrels per day (bpd), which is the largest increase since the pandemic, the agency said in its monthly report.
Related: North Sea Oil: Booming in Norway and Doomed in the UK
“Looking ahead, as the significant volumes of crude oil on water move onshore to major oil hubs, crude stocks look set to surge while NGLs start to drop,” the IEA noted.
Oil executives may be concerned about falling oil prices and declining profits in the short term, but they have seen their fair share of periods of oversupply and remain upbeat about the medium and long term.
“Fundamentally, the short term market is a little bearish,” Patrick Pouyanne, the chief executive of TotalEnergies, said at the forum.
“But we are quite bullish on the medium-term,” the executive added, pointing out to production decline rates and continued growth in global oil demand.
Non-OPEC crude production will begin to decline when oil prices are at $60 per barrel and lower, Pouyanne noted.
“There is a point at $60 per barrel where we’ll see the shale industry beginning to slow down,” Pouyanne said on the sidelines of the forum, as carried by Reuters.
“Our view is that from mid-2026 non-OPEC supply will be much lower, no growth, and then OPEC will be regaining control of the market,” TotalEnergies’ top executive said.
Ryan Lance, chairman and CEO of ConocoPhillips, said that “At $60-$65 a barrel WTI oil prices, the US is probably plateau-ish.”
U.S. oil output could grow by between 300,000 bpd and 400,000 bpd this year, Lance said.
