Oil market will face supply shortage by end of 2025, Occidental CEO says

MON, FEB 5 2024

KEY POINTS

• The oil market will face a supply shortage by the end of 2025 because the world is not replacing crude reserves fast enough, Occidental CEO Vicki Hollub said.
• About 97% of the oil produced today was discovered in the 20th century, she told CNBC.
• The world has replaced less than 50% of the crude produced over the last decade, she said.
• “We’re in a situation now where in a couple of years’ time we’re going to be very short on supply,” Hollub said.

“We’re in a situation now where in a couple of years’ time we’re going to be very short on supply,” she told CNBC’s Tyler Mathisen at the Smead Investor Oasis Conference in Phoenix.
For now, the market is oversupplied, which has held oil prices down despite the current conflict in the Middle East, Hollub said.
The U.S., Brazil, Canada and Guyana have pumped record amounts of oil as demand slows amid a faltering economy in China.
But the supply and demand outlook will flip by the end of 2025, Hollub said.“The market is out of balance right now, but again, this is a short-term demand issue,” Hollub said. “But it’s going to be a long-term supply issue,” she said.

Hollub told CNBC in December that Occidental expects WTI to average around $80 in 2024.