Report: Long-term oil supply dwindling, new discoveries needed

A recent report from New York City-based investment research firm Melius Research examined the implications of prolonged oil and gas demand growth with years of underinvestment in exploration and drilling. The trends set the stage for higher oil prices in the future, the report predicts.

“Long term supply is dwindling,” the report observed. “We see an environment where oil demand will continue to rise coupled with decades of underinvestment, creating a supply constrained environment for oil.”

The report noted that prolonged declines in exploration activity, American shale production, and higher offshore costs (“although this is changing,” the report said), when contrasted against a slower energy transition, sets up the case for a higher oil price to meet demand.

The report said: “We see the same sentiment echoed by Vicki Hollub, CEO of Oxy: ‘When you have the best discovery that has been made in the past couple of decades [Guyana] producing only enough to cover one-third of the demand in one year, that's a big issue.’”

Hollub made her comments at the IP Week conference in London on October 15, 2025. In the context of discussing challenges in replacing global oil reserves amid insufficient exploration, she highlighted ExxonMobil's offshore Guyana discoveries (in the Stabroek Block) as the most significant recent find, but emphasized its limited scale relative to worldwide demand.  

Keeping to that theme of rising demand, the Melius Research report concluded that: “we [have] considerable uncertainty that demand [will] decline any time before the end of the century[,] unless the emerging world remains in energy poverty.”