Global competition for upstream oil and gas investment

Oil rig off the coast of Alabama
Oil output increased on the U.S. Gulf Coast during the oil price slump of 2014-2016 due to investment decisions taken during the previous period of high prices (source: dpa)
  • Upstream oil and gas investment tends to follow prices, as we saw in 2014-2016
  • However, other variables are also key – including time lags and government policy
  • State-led reforms have stimulated productive investments in some countries

The international energy community is usually divided about conditions on the oil market. When prices increase, consuming nations complain and producers rejoice. When prices fall, those feelings of happiness – or discontent – are reversed. The cycle goes on and it is never clear what would satisfy both parties.

Today, however, the international community seems united in one concern. Organizations representing consumers and producers are warning that an energy crisis is looming, because the current oil price environment does not provide sufficient motivation for investment.

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