Full Title: Upstream Oil and Gas Investment Outlook
Author(s): Mason Hamilton, Allyson Cutright, Roger Diwan, and Karim Fawaz
Publisher(s): International Energy Forum and S&P Global Commodity Insights
Publication Date: February 15, 2023
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The state of the global economy and the energy sector has been transformed since our last upstream investment report (Investment Crisis Threatens Energy Security, December 5, 2021). The economic outlook for the near-term has deteriorated significantly while the geopolitical risks, and price volatility, across the energy sector have surged following Russia’s invasion of Ukraine.
For the time being, long-term demand uncertainty has been overshadowed by turmoil impacting near-term supply and demand. On the supply-side, there are many outstanding questions about the depth and duration of a reduction in Russian production. On the demand side, there are many outstanding questions about the depth and duration of a global economic slowdown and how much China’s lifting of COVID-zero policies will offset sluggish demand elsewhere.
For policymakers, security of supply has re-emerged as a top priority. However, there is lingering uncertainty as to whether increased interventionism by governments in energy markets are a symptom of extraordinary circumstances in 2022 or a strategic shift that will transform into longterm policies, market structures and price formation.