for Upstream Investment
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If oil demand were to peak, the industry would likely see a good bit of consolidation, but the situation would not bring about a collapse.
Exxon has dismissed the probes of its accounting practices as unwarranted and politically motivated, but they could mark a watershed moment for the oil and gas industry.
Lost in the talk about the decrease in upstream spending is how Middle East producers, most notably Saudi Arabia, have not cut back in investment, setting the stage for them to see sharp gains in market share when tighter fundamentals are realized.
"What is lacking, particularly in the US, is a robust public conversation about breaking oil’s monopoly and replacing it with cleaner transportation energy."
In addition to its role as the top importer, China is one of the world's top five producers of oil. But its contributions to the global market are dwinding this year as its oil companies slash upstream investment.
Chevron, Shell, ConocoPhillips, and ExxonMobil are all announcing limits on megaproject spending to focus on shale oil and gas production.
Many integrated oil companies remain well positioned, but a price on carbon is unlikely to be welcomed in the current environment, where low oil prices have put the industry on its heels.
Alongside a corruption scandal, the oil price downturn is challenging the viability of developing Brazil's pre-salt reserves, and prompting debates about the government's role in the energy sector.
Consumers may be enjoying the current low prices, but as oil companies are steadily pushed into more and more challenging geological and political environments, they should probably enjoy cheap fuel while it lasts.