Report
2 min read
• Aug. 26, 2024Energy supply
- The world’s demand for oil and natural gas remains strong.
- Oil and natural gas supply from existing wells naturally declines over time, making sustained investments more important than ever.
- Growing demand for LNG, driven by the Asia Pacific region, is underpinned by growing North America and Middle East supply.
Report
2 min read
• Aug. 26, 20242050 insights
Significant new oil and natural gas supplies are needed to meet society’s demand.
- Decline rates of existing fields are the biggest driver for new supply needed, and the reason significant investment is still required even before accounting for demand growth.
- The annual decline of existing supply is higher now, with an increasing mix of unconventional resources, such as U.S. tight oil, which decline faster than conventional oil and natural gas resources.
Global oil projected supply and demand
Million barrels per day
IPCC AR6 Scenarios Database hosted by International Institute for Applied Systems Analysis (IIASA) release 1.0 average of 306 IPCC C3: "Likely Below 2°C" scenarios.
IEA scenarios from ‘23 World Energy Outlook; 3rd Party high 2023 OPEC World Oil Outlook 2045: Laissez-Faire case (see reference list).
Decline rates based on 10-yr CAGR.
Natural gas projected supply and demand
BCFD
IPCC AR6 Scenarios Database hosted by International Institute for Applied Systems Analysis (IIASA) release 1.0 average of 306 IPCC C3: "Likely Below 2°C" scenarios.
IEA scenarios from ‘23 World Energy Outlook; 3rd Party high 2023 OPEC World Oil Outlook 2045: Laissez-Faire case (see reference list).
Decline rates based on 10-yr CAGR.
Sensitivity analysis on constrained oil and natural gas investment:
- In the absence of any further investment, oil supply would be expected to quickly decline at ~15% per year, leading to major shortages of critical energy supplies. Similarly, natural gas supply would decline by ~11% per year without investment.
- Some have advocated for continued investment in existing fields, but no new oil and natural gas developments. This would still lead to energy shortages, as oil supply would decline by ~4% per year and natural gas by ~3% per year.
- The resulting supply in either case of constrained investment would be well below levels needed to meet projected demand, even in the majority of the IPCC’s Likely Below 2°C scenarios.
Liquids supply by region and type
Million barrels per day of oil equivalent
Liquids supply / demand balance varies by region.
- Asia Pacific remains the largest and fastest-growing region for liquids demand, and increasingly relies on imports.
- North America supply is expected to peak sometime next decade as U.S. tight oil fields mature, but the region remains a large net exporter.
- The Middle East is projected to gain share post 2035, and support nearly all future growth in demand.
Natural gas supply diversifies and trade grows to meet rising demand
Billion cubic feet per day
Share of supply growth 2023-2050
Asia Pacific and Europe benefit from LNG imports
Billion cubic feet per day
Natural gas supply diversifies, and LNG trade grows to meet rising demand.
- By 2050, LNG trade will meet nearly 20% of the world’s natural gas needs, driven by growth in Asia Pacific.
LNG exports by region
Billion cubic feet per day
Diverse natural gas supplies underpin new LNG exports.
- North America and the Middle East significantly increase export capacity to meet the world’s growing needs.
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Cautionary statement
The Global Outlook includes Exxon Mobil Corporation’s internal estimates of both historical levels and projections of challenging topics such as energy demand, supply, and trends through 2050 based upon internal data and analyses as well as publicly available information from many external sources including the International Energy Agency. Separate from ExxonMobil’s analysis, we discuss a number of third-party scenarios such as the Intergovernmental Panel on Climate Change Likely Below 2°C and the International Energy Agency scenarios. Third-party scenarios discussed in this report reflect the modeling assumptions and outputs of their respective authors, not ExxonMobil, and their use and inclusion herein is not an endorsement by ExxonMobil of their results, likelihood or probability. Work on the Outlook and report was conducted during 2023 and 2024. The report contains forward looking statements, including projections, targets, expectations, estimates and assumptions of future behaviors. Actual future conditions and results (including energy demand, energy supply, the growth of energy demand and supply, the impact of new technologies, the relative mix of energy across sources, economic sectors and geographic regions, imports and exports of energy, emissions and plans to reduce emissions) could differ materially due to changes in economic conditions, the ability to scale new technologies on a cost-effective basis, unexpected technological developments, the development of new supply sources, changes in law or government policy, political events, demographic changes and migration patterns, trade patterns, the development and enforcement of global, regional or national mandates, changes in consumer preferences, and other factors discussed herein and under the heading “Factors Affecting Future Results” in the Investors section of our website at www.exxonmobil.com. The Outlook was published in August 2024. ExxonMobil assumes no duty to update these statements or materials as of any future date, and neither future distribution of this material nor the continued availability of this material in archive form on our website should be deemed to constitute an update or re-affirmation of this material as of any future date. This material is not to be used or reproduced without the permission of Exxon Mobil Corporation. All rights reserved.