Oil Market Will Tighten But Shale Should Prevent Supply Crunch
Concerns about a post-2022 supply crunch and price spike in oil markets are mounting in some corners of the industry, but are they warranted? Probably not.
The worry is that years of upstream underinvestment will hit just as global oil demand recovers to pre-Covid levels and non-OPEC supply peaks. There are problems with this line of thinking – on both the supply and demand sides.
For starters, the demand outlook is more uncertain than ever. While I don’t believe 2019 marked the peak for global oil demand, there’s no doubt Covid-19 has dealt a big blow, and that demand may not return to its 2019 rate of roughly 100 million barrels a day until sometime next year.