Oil's lost decade is about to be repeated

FOR AS LONG as most of us can remember, a rule of thumb has held true: Every year, the world’s production of oil goes up by one million barrels a day.

- By David Fickling

In 1983, the figure stood at 56.6 million barrels. In 2023, 40 years later, it was 40 million barrels more: 96.3 million. Annual figures may jump around thanks to wars, recessions, and the rise and fall of economies, but averaged over the longer term, every decade we've added an extra 10 million daily barrels to the headline total.

But you have to look closer than that. Much of what’s labeled “oil production” isn’t oil at all, but gases such as ethane, propane and butane as well as biofuels. If you consider only crude oil — the stuff subject to OPEC’s quota policies, with prices quoted on the nightly news — production is barely increasing at all. Global output this year will be just 360,000 daily barrels greater than in 2015, according to the latest outlook from the US government's Energy Information Administration.

Even looking forward to 2026, crude output is likely to remain below the production peak the world hit in 2018. This will be the first time the industry hit a lost decade since the 1980s, when it was buffeted by the aftermath of the 1970s oil crises and decline of the Soviet bloc. As electric vehicles take more market share and climate damage grows, subsequent decades will be even worse.