Oil producers to keep on pumping to 2050 and beyond

The world will carry on consuming oil, more than 100 million barrels per day to 2050 and beyond, with the oil producers’ cartel OPEC+ having just decided to keep on pumping and leave output levels unchanged.

Crude oil is currently near its cheapest levels in history when measured against money supply, with the benchmark Brent at $63.60 a barrel, making it one of the most undervalued commodities in the world today.

Τhe outlook for oil demand into the next decade looks more robust than it has for some time, with positive implications for the entire value chain, confirming oil’s resilience in the energy system.

The IEA’s “historic oil glut” narrative is collapsing in real time. US production, the foundation of their entire forecast, has now been quietly revised downward.

A Reuters poll sees the West Texas Intermediate (WTI) averaging just $59/b in 2026, with Brent at $62.23/b, as rising OPEC+ and non-OPEC+ supply keeps markets oversupplied. Goldman forecasts WTI at $53/b next year, while ConocoPhillips warns US shale will plateau at $60-65/b.

But following a bearish 2026, oil market structural realities point to $75-80/b by 2028. Such a price could spark investment to balance the market in the early 2030s.

However, Standard Chartered said it sees “potential for improvements in global demand in 2026, notably in China and the US, alongside expected fiscal stimulus following 12 months of aggressive easing cycles,” leading to higher prices.

Global oil power is concentrating fast. The top 15 oil producers now pump 46 mln bpd, up from 34 mln bpd in 2000, led by Saudi Aramco at 10.4 mln bpd. Supply is no longer diversified, it’s concentrated.

Chevron CEO Mike Wirth said, “we know where the oil is. We left 90% of it behind. It would be the first time in history that we didn’t figure out how to recover it,” by extracting more oil from existing wells. Today, American drillers recover, at best, 10-15% of the shale oil in place. That could soon change. I’ve “never been more confident” about oil, Wirth said.

US shale companies are moving forward with production plans despite crude prices at $60/b, with some announcing slight output increases for this year or 2026. Advancements in drilling technology have made producers more efficient, allowing them to pump more crude for every dollar spent.

Canada’s PM Mark Carney pledged support for one or more new oil pipelines, deep water oil ports, and scrapping the cap for oil emissions.

Quite a rollback of climate policy, especially as it comes exactly ten years after Carney catapulted the “stranded assets” theory into a hot financial topic, helping to trigger a wave of divestment in oil, gas and coal.

Indonesia invited firms to explore 108 untapped oil and gas basins. While the hot argument at COP30 was about oil and gas phaseout, Indonesia and many others are going in the opposite direction.

Guyana is becoming ExxonMobil’s oil production growth engine. From zero production in 2019 to 1.2 mln bpd by 2027, ExxonMobil has sanctioned $45 bln across five floating production, storage and offloading units (FPSO), with a sixth on the way.

Peak or no peak, the world is likely to consume more than 100 mln bpd of oil until 2050. Whatever one focuses on, whether the IEA’s “current” or “stated” policy scenarios, oil demand will stay very strong on its current path for the next 25 years and keep rising.

In the US, President Donald Trump’s tariffs are not reducing the trade deficit. Both exports and imports have fallen, and US manufacturers are hurting.

Chevron set its 2026 capex at the low-end of its long-term guidance range, focusing on high-return upstream projects, disciplined capital allocation and profitable growth. About 60% of this will be invested in the US.

The company is pursuing “value over volumes.”

Chevron will prioritise boosting shareholder returns over production growth over the next five years, according to a new business plan that emphasises cutting costs and reducing capital expenditure.

In the US, demand for gas is expected to grow even faster than for oil, due to the critical role gas will play in providing the energy backbone for data centres and advanced computing. Chevron and ExxonMobil are feeding the need for gas power.

US LNG exports will shrink if the margin squeeze intensifies. Soaring US natural gas prices are eroding profit margins for the nation’s LNG producers, a trend that could deepen in the coming years, forcing exports to drop as worldwide competition heats up and LNG prices come down.

The US has become the refinery to the world. In November, exports of US petroleum refined products reached 7.5 mln bpd. That’s more than double the export rate a decade ago.

Refining margins are soaring as oil product markets tighten. European diesel margins reached $33.90/b in November.

The US Export-Import Bank plans to spend $100 bln to achieve US energy dominance.

Energy and minerals are stitched deeply into the just-released White House US national security strategy that formalises opposition to climate policies such as “net-zero”.

World energy demand has risen nearly 60% since 2000, with more than half of the increase taking place in China. In the coming years, other emerging economies, led by India and southeast Asia, are set to become increasingly influential in growth trends.

China plans to deepen global cooperation and push its NEV, battery, solar and wind firms abroad as it accelerates a low-carbon manufacturing transition. With greater than 70% of global clean-tech capacity, its exports are reshaping markets and fueling western trade tensions in the process.

Clean energy has just put China’s CO2 emissions into reverse for first time.

Goldman Sachs believes China’s economy could grow 6% in 2026 as exports defy Trump’s tariffs and a property crisis begins to ebb. This would boost oil and energy demand.

China’s massive buildout of power generation capacity will give it a leg up over the US in the race to expand data centres fueling artificial intelligence (AI), according to Goldman Sachs.

China is now making more money from exporting green technology than America makes from exporting fossil fuels. This trend will continue as the world expands green energy.

China’s oil and gas giants have spent close to $470 bln between 2019-2025 to boost output and cut reliance on imports. That has made PetroChina the world’s biggest spender.

Dr Charles Ellinas is Councilor, Atlantic Council

X: @CharlesEllinas

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