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The oil industry is currently grappling with recovery from the pandemic and capital shortfalls, while OPEC and its allies continue to impose production limits. These factors combined are leading to a scenario where energy prices could see a significant rise in the foreseeable future.
Additionally, Woods noted that output from US shale, particularly the Permian Basin, is projected to decline by 2024. This decline is expected to exacerbate the situation as there are currently no substantial projects in place to counter the anticipated surge in oil demand. Consequently, it is likely that oil prices will be heavily influenced by demand in the coming years.
The global economy’s trajectory will play a crucial role in shaping these dynamics. The US economy is showing signs of stability, China is gradually recovering from the pandemic’s impact, and Europe is dealing with economic challenges due to a Russian gas deficit. These varying economic situations across key global players will undoubtedly have an effect on oil prices and demand.
Woods’ comments underscore the complex challenges facing the global oil industry as it navigates post-pandemic recovery and grapples with supply constraints and shifting demand patterns. It remains to be seen how these factors will ultimately impact energy prices in the long term.
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