Breaking Down: Collapse Daily Episode 15 - Increasing Risk of Oil Supply Shock
Sep 26, 2025
Investments in oil and gas are primarily just offsetting declining production, with 90% of funds going to maintain supply rather than expand it. There's growing concern that without new investments, we could see a steep decline in oil output, leading to potential supply shocks. Political pressure to increase drilling may backfire by exacerbating environmental issues. As renewable energy struggles to catch up, the threat of economic disruption looms large. The future landscape of oil production looks increasingly geopolitically complex.
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Growth Mostly From Existing Fields
- The IEA's Oil 2025 report flags a shift: most recent growth relies on expanding existing fields, not new discoveries.
- Two-thirds of recent ramp-ups are expansions and 70% of new conventional approvals are offshore, which decline faster.
IEA Report Is Detailed And Technical
- Corey highlights the IEA report length and technical depth, noting it runs 73 pages with many detailed graphs.
- He uses that to explain he will only summarize key takeaways rather than cover every technical point.
Rapid Declines Drive Replacement Spending
- Offshore and small fields decline much faster than supergiant onshore fields, raising replacement needs and costs.
- The IEA finds 90% of recent oil and gas investment only offsets decline, leaving 10% for new supply growth.