Big Oil Plans Billions in Long-Term Investment Despite Short-Term Market Challenges

The oil industry is currently facing a challenging short-term outlook, marked by spending cuts, job reductions, and cautious behavior from major producers like TotalEnergies, Chevron, and ConocoPhillips. Despite predictions of lower oil prices in the near future due to oversupply concerns and subdued demand, this bearish phase is expected to be temporary. Notably, U.S. shale drilling has slowed down, and OPEC+ members are struggling to meet their production increase targets, which tempers fears of a supply glut. Meanwhile, energy companies' investment plans indicate confidence in a long-term recovery and bullish prospects for fossil fuels, driven by a renewed focus on energy security post-2022 and a strategic shift back to core oil and gas operations by firms such as BP and Shell. Price forecasts foresee Brent crude falling from $68 per barrel in 2025 to $51 in 2026, compounded by an anticipated surge in liquefied natural gas capacity from the U.S. and Qatar. In response to near-term headwinds, oil majors are cutting costs and scaling back share buybacks, yet their capital spending strategies suggest they expect significant market improvements towards the end of the decade.