Global Oil Extraction Investments Decline, Yet Production and Exploration Continue to Grow
According to recent analytical reports, the global oil market is experiencing a significant transformation characterized by shifts in investment patterns. Despite a modest decrease in global oil extraction costs projected at around 1.1% and amounting to approximately $543 billion in 2024, oil production itself remains stable and is expected to increase. This marks the first reduction in investments since 2020, driven mainly by economic instability and rising geopolitical tensions, which have led oil companies to adopt a cautious approach towards investment. The most notable budget cuts are observed in the Asia-Pacific region, amounting to nearly 5%. Major industry players like PetroChina and Sinopec from China have already announced reductions in exploration and production investments. In the United States, capital expenditures dropped by about 1.9%, particularly among shale sector companies. Meanwhile, operators are actively engaging in hedging activities, locking in prices on nearly 250 million barrels, thus ensuring a moderate growth of crude oil and condensate production at around 253,000 barrels daily by 2025. Despite the overall decline in investments, JP Morgan forecasts a global increase in oil production by 2.3 million barrels per day in 2025, attributed to enhanced operational efficiency and reduced production costs, which opens new opportunities for the industry in the long term.