In a bold counter to the International Energy Agency’s (IEA) dire predictions of a massive oil surplus, executives from Europe’s leading oil majors—BP, Eni, and TotalEnergies—are sounding the alarm that the so-called “2026 oil glut” may be nothing more than an illusion. While the IEA forecasts an “untenable” oversupply potentially reaching 4 million barrels per day (bpd) by 2026, these industry titans argue that chronic underinvestment and resilient global demand could flip the script, leading to tighter markets and potential price spikes instead.
This perspective, highlighted in recent executive statements, underscores a growing divide between agency projections and on-the-ground realities in the energy sector.
The Sources Behind the Warnings
The pushback gained traction through industry discussions and public commentary, notably in a recent analysis by energy strategist Giacomo Prandelli. BP CEO Murray Auchincloss emphasized the investment shortfall, stating, “Non-OPEC supply growth will slow by April 2026—we’re simply not investing enough.” He highlighted rising demand in Asia and the Middle East, warning that without accelerated upstream projects in regions like Abu Dhabi, Iraq, and Libya, supply could lag behind consumption.
Eni CEO Claudio Descalzi echoed this sentiment, noting, “We’ve been investing half of what we needed for ten years.” He cautioned that further price declines could trigger a collapse in investments, paving the way for shortages and a price rebound by 2027.
TotalEnergies CEO Patrick Pouyanné pointed to shifting demand dynamics, declaring, “India is the new demand engine,” with steady 1% annual growth fueled by emerging markets and recovering sectors like aviation.
These comments align with OPEC’s more optimistic outlook, which anticipates demand growth of 1.3 million bpd in 2025 and 1.4 million bpd in 2026, driven largely by Asian economies.
In contrast, the IEA’s October 2025 Oil Market Report paints a stark picture of surplus, with global supply expected to surge by 3 million bpd to 106.1 million bpd in 2025 and another 2.4 million bpd in 2026, outpacing subdued demand growth of just 700,000 bpd annually.
Global Demand vs. Investment: A Precarious Balance
The debate hinges on the interplay between global oil demand and upstream investment. According to the IEA’s long-term outlook in Oil 2025: Analysis and Forecast to 2030, demand is set to rise modestly from 103.0 million bpd in 2024 to 103.8 million bpd in 2025 and 104.5 million bpd in 2026, before plateauing around 105.5 million bpd by 2030.
Growth will be led by emerging economies, adding 4.2 million bpd through 2030, with petrochemicals and jet fuel as key drivers—naphtha demand up 1.1 million bpd and jet/kerosene by 1 million bpd.
However, advanced economies will see a contraction of 1.7 million bpd, exacerbated by electric vehicles displacing 5.4 million bpd of road fuels by 2030.
On the supply side, global production capacity is projected to climb to 114.7 million bpd by 2030, with non-OPEC+ growth front-loaded at 1.6 million bpd in 2025 and 1.2 million bpd in 2026, primarily from the US, Brazil, and Guyana.
Yet, this expansion masks underlying vulnerabilities: natural field decline rates are accelerating, with conventional oil output dropping 5.6% annually post-peak and gas by 6.8%.
Without sufficient reinvestment, global supply could erode rapidly, as fields follow predictable decline curves requiring constant capital to maintain output.
Investment trends are concerning. Global upstream oil and gas spending is forecast to dip 4% to $565 billion in 2025, with oil-specific investment falling 6% to $420 billion—levels the IEA acknowledges are insufficient for long-term stability.
This underinvestment, compounded by geopolitical tensions and economic uncertainty, risks amplifying supply risks beyond 2026.
Echoing Warnings from Energy News Beat: Trillions Short on Investment
For years, Energy News Beat has been at the forefront of highlighting these investment gaps, consistently warning that the world is short trillions of dollars in capital just to offset natural decline curves.
Recent articles emphasize how accelerating decline rates—5-10% annually in conventional fields without intervention—could erode supply without massive capex injections.
As one piece notes, “All trends and data points indicate that we are still short by trillions of dollars in capital expenditures to meet standard decline curves,” aligning with the European majors’ concerns about future squeezes rather than gluts.
This narrative supports the view that short-term surpluses must not deter exploration, as long-term demand resilience could lead to shocks from neglect, not oversupply.
European vs. US Oil Majors:
Shareholder Returns Over the Last 5 YearsAmid these market uncertainties, oil majors have prioritized returning capital to investors through dividends and buybacks, but strategies differ markedly between European and US firms. Over the last five years (2020-2024), US giants like ExxonMobil and Chevron have leaned heavily on massive buyback programs, while European peers such as BP, Eni, and TotalEnergies have focused more on consistent dividends, often yielding higher returns relative to share prices.
In 2024 alone, shareholder payouts by BP, Chevron, Eni, ExxonMobil, Shell, and TotalEnergies hit a record $119 billion, surpassing the previous high in 2023.
Looking at 2023 as a representative year (with trends consistent across the period), US majors distributed $27.5 billion in dividends (ExxonMobil: $17.9 billion; Chevron: $9.6 billion), slightly edging out Europeans’ $30.5 billion (TotalEnergies: $14.8 billion; Eni: $8.4 billion; BP: $7.3 billion).
However, US firms dominate in buybacks: Chevron leads with a $75 billion multi-year program, followed by ExxonMobil’s $50 billion, reflecting a flexible approach to reward shareholders during high-profit periods.
European majors, facing scrutiny over rising debt and weaker crude prices, have higher forward dividend yields (Eni: 6.14%; TotalEnergies: 4.93%; BP: 4.85% for 2024 estimates) compared to US counterparts (ExxonMobil: 3.55%; Chevron: 4.21%), making them more attractive for income-focused investors.
Buybacks in Europe, while growing since 2021, are tied to 15-25% of cash flow from operations, prioritizing dividends amid calls for restraint—BP and TotalEnergies recently announced reductions in buybacks to manage balance sheets.
Overall, cumulative returns over the five years favor US majors in absolute buyback scale, but Europeans have delivered competitive total payouts, with sector-wide dividends rising to $274 billion in 2023 and projected at $287 billion in 2024.
As oil prices hover below $70 per barrel, both regions face pressure, but the European warnings on investment shortfalls suggest a strategic pivot toward sustainability over short-term rewards.
In summary, while the IEA’s glut forecast looms large, the voices from BP, Eni, and TotalEnergies—backed by outlets like Energy News Beat—remind us that energy markets are as much about investment foresight as they are about current supply. The real mirage might be assuming abundance without action.
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