"Current Oversupply Is Short-Term... Reversal Within a Few Years"
Vicki Hollub, CEO of Occidental Petroleum, a leading American energy company, warned that there could be an energy shortage by the end of 2025.
According to CNBC on the 5th (local time), CEO Hollub said at the Smid Investor Oasis Conference held in Phoenix, USA, "We are now facing a situation where supply will become very tight within a few years."
Currently, the oil market is in a state of oversupply. Despite heightened geopolitical tensions in the Middle East, oil price increases are being restrained. As the Chinese economy falters and demand slows, the United States, Brazil, and Canada have produced record amounts of oil. Supply exceeds demand.
However, CEO Hollub emphasized, "By the end of 2025, the supply and demand outlook will reverse." She added, "The current market is out of balance (between demand and supply), but this is a short-term issue," and "However, supply problems will become a long-term issue."
CEO Hollub stated, "About 97% of current oil production sites were discovered in the 20th century." Although crude oil supply currently exceeds demand in the short term, there could be supply shortages in the long term.
The Organization of the Petroleum Exporting Countries (OPEC) expects global oil demand to increase by an average of 1.8 million barrels per day by 2025. This exceeds the crude oil production of non-OPEC countries, which is 1.3 million barrels. CNBC explained that unless OPEC withdraws its current production cut policy and increases output, this implies a supply shortage.
CEO Hollub previously stated to CNBC in December last year that Occidental expects the average price of West Texas Intermediate (WTI) crude oil to be around $80 this year. This aligns with Goldman Sachs' forecast. Goldman Sachs analyzed that crude oil supply shortages could act as upward pressure on prices, predicting that crude oil prices could rise to $100 per barrel.
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