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Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

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Oil Major Total Sees 10 Million Bpd Supply Gap In 2025

France's supermajor Total is warning that the world could find itself with a shortfall of supply of 10 million barrels per day (bpd) between now and 2025, due to continued underinvestment in the industry, the OPEC+ pact, and cracks in the U.S. shale business model.

"There is a risk of supply crunch in the mid-term," Helle Kristoffersen, President, Strategy and Innovation at Total, said on the company's Q4 earnings call this week.

"We have seen in 2020 how OPEC managed to bring back market discipline. We've seen the cracks in the US shale model, and we've seen a continued underinvestments in the oil industry as a whole," Kristoffersen said.

The market needs new oil projects, considering the fact that many producing oilfields will see natural declines in production, the executive said.

"And that's true, even if you take very cautious view on short-term demand recovery and on future demand levels," Kristoffersen added, noting that "a 10 million barrels per day gap in supply between now and 2025, that's a massive shortfall of supply to cover in just a very few number of years."

Last year, the coronavirus accelerated a structural decline in upstream oil investments as all E&P firms, oil supermajors, U.S. shale producers, and national oil companies alike, slashed capital expenditures in the wake of the price crash.

Investments in new oil supply have now slumped to a more-than-a-decade low.

OPEC+ currently has a lot of spare capacity that could come on stream when demand recovers. But sustained investments in oil and gas will be needed to meet global consumption of oil, which the world will continue to need, peak demand or not, analysts and forecasters warn.

"The world may be sleepwalking into a supply crunch, albeit beyond 2021. A recovery in oil demand back to over 100 million b/d by late 2022 increases risk of a material supply gap later this decade, triggering an upward spike in price," says Simon Flowers, Chairman and Chief Analyst at Wood Mackenzie.    

By Tsvetana Paraskova for Oilprice.com

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  • Carlos Everett on February 10 2021 said:
    If it wasn't just cruel to tell the market, that some homes may not be heated and possible customers standing in line to get gasoline, this would be downright funny. The environmentalists and everyone in California has been telling us that offshore wind and solar is going to be the savior and there will not be any need for natural gas and crude oil in the next few years. Congress, particularly AOC and Crew have been telling us that we are going to have oil and gas assets stranded, so investors should take heed and understand that EV cars is all that will be on the highway.

    Now they tell us , the same thing that California regulators just told the environmentalist, if you shut down those 3 Natural Gas Plants in California now in 2020, the blackouts will be much worse in 2021 in California and those electric cars will not go very far when they are not charged due to Wildfires or lack of a energy source.

    Maybe California can use the hydrocarbons that Tesla, Hewlett Packard and Oracle are not going to use in 2021 because they decided they had had enough of California and their idiotic congressman "TaxMen". The Governor of California is busy housing their homeless by taxing the Californian's more to allow the homeless to defecate hopefully in the hotel instead of literally employing 3-4 individuals just in San Francisco to go around cleaning up after these people and guess who pays for those 3-4 people. I bet Gavin and Nancy are not paying for it???

    These congressman's are the same people that have a 13% tax on highly paid individuals, so when Tom Brady became available a year ago, the LA Chargers offerred the highest amount but because of California's 13% tax, Brady made more money in Tampa Bay because Florida has no state tax. So just visualize this, if California had a decent congressman base, they would have received Brady's services and possibly won the Super Bowl!!! If that was just not so depressing to California's, I would be laughing with you, but remember Tennessee, Texas and Florida would love for you to move to their "no state income tax state" !!!!!!!!!!!!!!!!

    Biden takes his first swing and shuts down major delivery pipelines, so when somebody needs natural gas or heating oil this winter, pick up the phone and ask "AmazonAOC" or Biden to please send a truckload of whichever product is needed , i am sure both of those individuals can resolve your problem. Remember, you voted for her and Biden.

    Did we just not hear from the Rockenfellers and several other major pensions are no longer going to invest in hydrocarbons, because there will not be a need, as "Amazon AOC" guarantees that solar and wind will save us. They should be the first ones to freeze! Idiots!!

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