Oil demand growth has started to show signs of slowing, and demand could fall by up to 50 percent by 2050. However, investment in a broad energy mix, including oil and gas, could continue for a period to shore up security of supply and meet demand, particularly from end-use sectors such as chemicals, aviation, and heavy trucking. Consider North American shale oil production, which, according to senior partner Micah Smith and coauthors, could plateau in the mid-2020s at about ten million barrels per day and remain stable through 2040.
Image description:
An area graph shows the North American shale oil production projections through 2040, by source region, in millions of barrels per day (MMb/d). The 6 source regions are Mid-Con, Canada, Rockies, Eagle Ford, Bakken, and the Permian Basin. In 2022, the total actual production rate was ~8.5 MMb/d, with ~60% of that coming from the Permian Basin. By 2040, the projected production rate will be ~10 MMb/d, with ~65% of that coming from the Permian Basin.
Footnote: Current Trajectory scenario. Includes oil and condensate production; excludes Alaska.
Source: McKinsey Energy Solutions’ North American Supply Model.
End of image description.
To read the article, see “Global Energy Perspective 2023: Oil outlook,” January 24, 2024.