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10 Feb, 2024 06:24

Oil boss warns of impending supply shortage

The energy market is out of balance right now, according to Occidental’s Vicki Hollub
Oil boss warns of impending supply shortage

The global oil market will face a supply shortage by the end of 2025 as crude reserves are not being replaced fast enough, Vicki Hollub, the CEO of US energy firm Occidental, warned in an interview with CNBC published this week. 

About 97% of the oil currently being produced comes from discoveries made in the 20th century, whereas less than half of the crude output of the last decade has been replaced, she said.

“We’re in a situation now where in a couple of years’ time we’re going to be very short on supply,” Hollub stated, noting that the oil market is currently characterized by an oversupply, driven by record production in the US, Brazil, Canada and Guyana. This surplus has held oil prices down despite the ongoing conflict in the Middle East, she believes.

Despite the current oversupply, Hollub projected that by end of 2025 demand will outpace supply. “The market is out of balance right now, but again, this is a short-term demand issue,” she said, adding “but it’s going to be a long-term supply issue.” 

Meanwhile, OPEC said last month that global oil demand will grow by 1.85 million barrels per day (bpd) in 2025 to 106.21 million bpd, outpacing crude production growth of 1.3 million bpd outside the alliance. The projection implies a supply deficit unless OPEC abandons its current production cuts and increases its own output, according to CNBC.

For more stories on economy & finance visit RT’s business section

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