New Oil Projects Set to Flood Market in 2025
This year will see the highest amount of new oil supply in a decade, according to data analyzed by Raymond James that showed projected global additions of nearly 3 million barrels daily.
But only if the price is right. Bloomberg reported the Raymond James figures, noting projects such as the giant Tengiz field in the Kazakh section of the Caspian Sea-one of the largest oil discoveries in modern times-and the Bacalhau field in Brazil, which has an estimated potential of 1 billion barrels of oil equivalent. Production expansions at Saudi fields will also contribute to the fresh wave of oil supply, the investment bank added.
“Investors have not fully grasped just how much new supply from projects is on deck in 2025,” Raymond James analyst Pavel Molchanov told Bloomberg. The thing is, this supply may get delayed if prices remain as depressed as virtually everyone expects them to remain this year due to the perceived imbalance between supply and demand, and indications of weak demand growth prospects.
Reuters’ Clyde Russell addressed the demand dynamics in a column this week where he argued that projections about China’s oil demand growth today did not match import figures. The demand projections were quite bullish, he noted, while import figures suggested a weakening. It does, however, bear noting that China was importing crude at record-smashing rates after the end of its pandemic lockdowns. What we are currently witnessing may in fact be a normalization of demand patterns.
Source: Oilprice
