The OPEC Monthly Oil Market Report (MOMR) for August 2025 was published recently. The last month reported in most of the OPEC charts that follow is July 2025 and output reported for OPEC nations is crude oil output in thousands of barrels per day (kb/d). In the OPEC charts below the blue line with markers is monthly output and the thin red line is the centered twelve month average (CTMA) output.
OPEC 12 output for May 2025 was revised up by 34 kb/d and June 2025 output was revised higher by 46 kb/d compared to last month’s report. OPEC 12 output increased by 263 kb/d with the largest increases from Saudi Arabia (170 kb/d), UAE (109 kb/d), Libya (22 kb/d) and Nigeria (16 kb/d). Iraq (51 kb/d) and Iran (12 kb/d) saw decreased crude output. All other OPEC members had small increases or decreases of 7 kb/d or less.
The chart above shows output from the Big 4 OPEC producers that are subject to output quotas (Saudi Arabia, UAE, Iraq, and Kuwait.) After the pandemic, Big 4 average output peaked in 2022 at a centered 12 month average (CTMA) of 20849 kb/d, crude output has been cut by 1800 kb/d relative to the 2022 CTMA peak to 19049 kb/d in July 2025. The Big 4 may have about 1800 kb/d of spare capacity when World demand calls for an increase in output.
The chart above shows the average annual increase of 143 kb/d for the Other 6 OPEC group which excludes the Big 4 and Iran and Venezuela. Iran and Venezuela have seen their output rise over the past 3 years at an annual rate of 420 kb/d which I believe will fall to zero in the near future. The chart below shows the long term trend for the OPEC Other 6 which is roughly flat (a small average annual rate of decrease of 11 kb/d over the past 11 years.) I expect the Other 6 will see their output return to this flat trend in the next few years.
The World liquids demand forecast for 2025 is unchanged from last month, but demand for 2026 has been reduced to 106.4 Mb/d (0.1 Mb/d lower than the July report.) Non-DOC liquids and DOC NGLs output has been revised lower this month compared to last month by 100 kb/d in 2026 (no change for 2024 or 2025.) The call on OPEC+ in 2026 (Difference a-b) has increased by 200 kb/d compared to last month’s report to 43.1 Mb/d.
Refinery crude throughput is a better way to determine World demand for C+C (though imperfect because some crude is burned directly in power plants in the middle east.) OPEC data shows the peak was 81.68 Mb/d in 2018. For the most recent 4 quarters the average World refinery throughput was 81.47 Mb/d, the previous 4 quarters had average refinery throughput at 81.16 Mb/d and 2024 had refinery throughput at 81.01 Mb/d. If the recent rate of increase continues (460 kb/d in 9 months) we may see a new peak in annual average World refinery throughput in 2025.
Preliminary June 2025 data show that OECD commercial inventories stood at 2,789 Mb, a decline
of 3.2 Mb from the previous month. At this level, OECD commercial stocks were 57.9 Mb less than the
same time last year, 91.7 Mb lower than the latest five-year average, and 158.6 Mb below the 2015–2019 average.
OPEC continues to revise its estimate of US tight oil output lower. This month the estimate falls by 4 kb/d in 2024, 20 kb/d in 2025, and 100 kb/d in 2026 compared to the July 2025 MOMR.
Much of the increase in US liquids output in 2025 and 2026 is from NGL, biofuels and other liquids.
The scenarios above give a range of tight oil scenarios with the medium scenario at 90 Gb being my best guess with a peak in 2026 at 10.54 Mb/d, the high and low scenarios are about 120% and 80% of the URR of the medium scenario, cumulative production from 2010 to 2024 is about 31 Gb and for the medium scenario cumulative output from 2010 to 2027 is 43 Gb. My guess is that there is roughly an 80% probability that output will fall between the low and high scenarios.
77 responses to “OPEC Update August 2025”
Dennis
A lot of interesting info in this OPEC report. The one big mystery is what is happening in Iraq. From January 2023 to January 2025, production has dropped by close to 500 kb/d or 250 kb/d/yr. Is this real in the sense that it can’t be fixed or is it just poor management of the fields, i.e. they can’t get their water injection program started/working.
In the last World oil report, the STEO projection showed November 2025 World oil production peak to be 1,729 kb/d higher than May. Of that C plus C increase OPEC is supposed to add 1,390 kb/d of all liquids. While I don’t have all of the required data, here is a peak into the challenge of getting to that new peak.
In the table below a comparison is shown of the production required from five OPEC countries along with their target. Four of the five are close to meeting their target. Iraq is 220 kb/d below target.
Also the September target is shown which is the final month for unwinding the 2,200 kb/d cut. The September target is 831 kb/d higher than July’s. These five might be able to add 550 kb/d of crude of the 831 kb/d required by September because Iraq is so far below target. Not clear how to compare the 550 kb/d crude with 1,390 kb/d of all liquids. Regardless the gap seems big.
The Q2-25 to Q3-25 jump in refinery through put is 1.8 Mb/d. The Q2-24 to Q3-24 increase in refinery through put was 700 kb/d. Where is this extra 1.1 Mb/d of through put demand coming from in 2025.
Ovi sometimes the increased refinery output may be used to refill depleted stocks.
Ovi
It looks like Iraq is starting to get proper contracts in place that companies are prepared to sign.
https://totalenergies.com/company/projects/gas/ggip-multi-energy-project-Irak
First phase of the common sea water project is due in 2028
BP has also signed a contract to develop Kirkuk oil field.
https://www.bp.com/en/global/corporate/news-and-insights/press-releases/bp-and-iraq-finalize-contract-for-kirkuk-redevelopment.html
And the Chinese are signing various contracts also.
https://www.reuters.com/business/energy/chinas-independent-oil-firms-elbow-into-iraqs-majors-dominated-market-2025-08-04/
I think by 2028 Iraq will be one of only a handful of countries that can increase oil production.
All the other 50 will be flat or in decline including the U.S.
Global oil production will be in decline and prices will be reasonable, Iraq will become a very rich country.
At least for some people.
Iver
Definitely good projects. Let’s see if Iraqi politics stays out of these contracts.
OVI,
Apparently OPEC is seeing major China comeback in refinery util, + 1MMbpd from Q324 to Q325.
Also, looks like 2025 is the year when India surpasses Russia as the third largest refinery sector.
Other non-OECDs are also adding up throughput.
North Dakota June Oil Production Rose
Production was up by 39 kb/d to 1,151 kb/d. June production is a rebound from May when some producers cut back production due to low oil prices.
In the April World post Gerry asked me to comment on the Canadian Oil sands. A few minutes after posting my comments, the OPEC post went up. I think I should repost ny comments here.
Gerry
Thanks for the idea. Below are some of my thoughts on Canada’s oil sands.
Here is a little known but very important fact about Canadian Oil sands, “Oil sand is made up of grains of quartz sand, surrounded by a layer of water and clay, and then covered in a slick of heavy oil called bitumen”.
The above statement is 95% true because in a few places the oil sands are oil-wet rather than water-wet. What this means is that the majority of the bitumen can be separated from the sand using hot water. That was the initial process. Now some paraffinic solvents have been added to the process to make the separation less energy intensive.
The first oil sands reserves were close to the surface and were mined. The initial idea was to upgrade the bitumen to a crude similar to WTI. No more exploration was required, just make the whole mining and upgrading process more efficient. The final upgraded product was known generally as synthetic crude and later Syncrude, now Suncor, made a blend known as Syncrude Sweet Blend and it was biased toward making more diesel. This was done by extracting carbon from the bitumen in a Coker and adding hydrogen extracted from natural gas. Some thought that the process was crazy but economically it worked well with cheap NG.
Fortunately the construction of these cokers and upgrading facilities was started in the late 70s and 80s and were relatively inexpensive, in the sense that one could make an economic case for them. A third one came online in the mid 2000s and I recall this because I owned an oil sands stock that crashed at the time. Before completion, they announced that the cost of the third Coker and upgrading facility had grown from $3.8 B to $8.3 B. The saving grace for the company was that the peak oil theory was going strong at the time and WTI hit $148/b a few years later. That I think was the last upgrader built in the oil sands.
Extracting oil sands oil has now moved to a new phase known as SAGD, Steam Assisted Gravity Drainage, because most of the remaining oil sands are too deep for open pit mining.
The other shift that has occurred is a move toward producing a crude blend known as as WCS, Western Canada Select. It is a mixture of bitumen, solvents and synthetic crude which is shipped to the US for upgrading and now to Asia now that the TMX pipeline is operational. This avoids the building of costly new upgraders.
It is estimated the Canadian oil sands proven reserves are in the order of 160 B barrels. The biggest challenges these days for extracting the oil sands are political and environmental and not economics even at $60/b WTI. The previous Prime Minister said that the oil sands need to be shut down. Creating the crude is energy intensive and the big push is to reduce the associated produced CO2 through carbon capture. The oil industry is asking for government assistant to build the capture facilities.
The Canadian oil sands may be the last oil standing after the easier World oil has been produced. At some point in the future society may have to make a decision as to whether it needs oil sands crude or whether it should be left as stranded oil.
https://open.alberta.ca/dataset/d5a7fec7-6e37-431c-9f33-eb98510c65e4/resource/eb20740d-d1bc-4e60-b441-99f6c84998d8/download/2016-oil-sands-discovery-centre-osdc-facts-about-albertas-oil-sands-and-its-industry.pdf
Thanks, Ovi. I’m optimistic that the oil-dense part, Christina Lake tract, will be very economical to produce, what with all the advances in SAGD. I am especially impressed with Cenovus, mainly bc of Jon McKenzie, who has a very steady hand on the tiller. Their purchase of MEG Energy should make Cenovus the powerhouse in SAGD (they say they’ve knocked $14/bll off production costs), with delivery right into the TMX. I’m certainly no expert but while we Americans tend to think of the vast Athabaskan oil sands as a single large basin, I realize that there are actually three or four layers of oil-rich sands, and that some areas are much more economical than others. I’ve never seen a steam-assisted gravity drainage pad up close and personal but in photographs look much more sophisticated now than just a decade ago. I suspect your access to Asian markets is going to the oil sands a very big deal in the future.
Gerry
I am already hearing of pipeline exit limitations. Not sure how much more can be squeezed out of the current system. Keystone is currently under pressure regulation. TMX is talking about using friction reducers and upgrading some pumping stations to higher pressure.
The Cenovus take over of MEG is great but it sounds like it is a sweet heart deal. Typically the takeover stock drops and target rises. In this case the target company dropped a bit from the Friday close and CVE rose. Clearly MEG is huge help to CVE and probably should be paying bit more. The market reacted by increasing the price of CVE. That is atypical. What is strange is the Strathcona offer is slightly better than CVEs. Makes me wonder if Strathcona might rebid.
Hey Ovi,
Thank your for all of the work you (and DC) have done with your posts and insights.
Did you see the International Institute for Sustainable Development recent report titled “Canadian Oil and Gas Production in the Global Clean Energy Transition”? Interested to hear your thoughts.
https://www.iisd.org/system/files/2025-06/canada-oil-gas-clean-energy-transition.pdf
T Hill
Thanks. Much Appreciated.
I typically do not read these reports because they have an agenda and will dig out numbers that enhance their case. Also I do not have sufficient background to check their figures and analysis.
Fortunately Canada was born with a silver spoon in its mouth. We are a small nation with a vast amount of natural resources, especially oil and wood. Starting in early 2000 when the price of WTI began its rise toward $100/b, our dollar was known as the Petro $. We largely export these resources and have become a nation to depended on natural resources. Our companies are small and have been taken over by larger US and international players.
The oil sands have been controversial in Canada since the early 2000s when their name was flipped from oil sands to tar sands. The pro oil faction relabelled it as Ethical oil and wrote a book. Our previous prime minister said that the oil sands had to be shut down. Once he came into power, he had to face the economic implications of his comments. Legislation was passed to slow the development of the oil sands and he shut down a proposed pipeline to the Pacific. This resulted in alienating the west. About 5 years ago, with his ratings falling he agreed to buy a pipeline project, TMX, to try to alleviate that alienation.
Here is my quick take on the report. Attached is a table that looks at the relative position of the oil industry in Canada. As part of Canada the industry looks small. However since the industry is concentrated in the west and NL, stopping or slowing that industry would have devastating effects in those provinces. Also the jobs numbers are very distorted. The numbers they quote are direct jobs. Since the service industry is 75% of the Cdn economy, a more realistic number is 3%. An internet search brought up these numbers.
“The fraction of Canadian jobs related to the oil production sector is roughly around 3%, with different sources citing figures like 3.2% in 2017 and 3.3% in 2016 for the total oil and gas sector, encompassing direct and indirect jobs. However, these figures have varied due to market conditions and industry shifts, and more recent data points to employment numbers supporting around 900,000 people when including induced jobs.”
The industry recognizes the challenges it faces and has reduced its environmental foot print. The latest effort is carbon capture and the industry is looking for government support. Not sure if this support is for a demonstration project or it means the process makes the produced crude uneconomic.
I appreciate these studies in the sense that governments hopefully will make better and more knowledgeable CC policies.
However I have a real basic problem with their premise. Let’s assume that Canada shuts down or slowly curtails its oil operations. Canada’s decreasing supply will then be made up by increasing OPEC oil supply. How does this help CC, let alone the transfer of Jobs from Canada to OPEC.
Thanks for the insights Ovi.
Natural gas is too precious to burn for SAGD. The sooner you install nuclear reactors to provide the heat, the better.
Ovi,
Note that the Canadian oil sands that have been developed are roughly 19 Gb as of 2020 according to Energy Institute Statistics. Not clear all of the 160 Gb of “proved” reserves will ever be developed. Also keep in mind that the OPEC reserves may have far lower EROEI than oil sands resources which will tend to have lower carbon emissions per unit of energy produced. This is also likely to be the case for tight oil compared to most OPEC output, particularly output from the OPEC Big 5 (KSA, UAE, Iraq, Iran, and Kuwait).
OVI — A lot of interesting info in this OPEC report. The one big mystery is what is happening in Iraq.
Who Is Playing Who In The Great Iraq Carve-Up? August 2024
Chinese firms won most of Iraq’s latest oil contracts, continuing China’s dominance in Iraq’s oil and gas sector.
https://oilprice.com/Energy/Energy-General/Who-Is-Playing-Who-In-The-Great-Iraq-Carve-Up.html
Why Does the US Still Control Iraqi Oil Revenues? September 2024
…Whenever Washington feels that Iraq is not compliant with US regional goals, these fund transfers can be delayed or reduced. In January 2020, for instance, after the Iraqi Parliament voted to expel US troops following the assassination of Iranian … the Trump administration threatened to freeze Iraq’s access to its oil revenues. Today, Iraq’s financial situation remains dire. Despite having oil revenues piling up in the Federal Reserve Bank of New York — estimated today at around $120 billion — Iraq is burdened with a growing debt that matches this amount.
http://www.envirosagainstwar.org/2024/09/30/why-does-the-us-still-control-iraqi-oil-revenues/
Iraq’s oil revenues are held in accounts supervised by the U.S. Federal Reserve Bank of New York. This arrangement began following the establishment of the Development Fund for Iraq (DFI) in 2003, which was designed to ensure transparency and manage Iraq’s oil revenues effectively.
A puppet state.
Thompson
Thanks for the info. Looks like the water processing plant is not up and running yet.
“The project involves taking and treating seawater from the Persian Gulf and then transporting it via pipeÂlines to oil production facilities to maintain pressure in oil reservoirs to optimise the longevity and output of fields. The initial plan for the CSSP is that it initially supplies around 6 million bpd of water to at least five southern Basra fields and one in Maysan Province and is then expanded for use in other fields.”
It’s good technology. I think it was the Saudi’s that first employed it? I know the water eventually makes it way with oil to the outlets, I wonder what they do with it after they extract the oil from it? I’ll have to look it up, I suppose it would still be salty. Would be a bonus if they could find a use for it out there in the desert.
Thompson
Note that it is states “The project involves taking and treating seawater”. The water is desalinated and also needs to be sterile so it doesn’t harm the oil basin
Ovi,
I think you misinterpreted treating as meaning desalination. The connate water in the underlying aquifer/ reservoir will usually be multiple saline concentrations of sea water. The treating part involves oxygen scavengers (usually sulphites) and biocides as well as filtration to remove suspended solids, and possibly antiscalants to avoid scale formation. This can be a simple as adding acid to reduce the alkalinity.
Sea water desalination is very expensive and difficult. Most sea water desalination is by multi stage flash evaporators which requires a large reject stream- about twice that of the produced water. Reverse osmosis also does not work well on sea -water as the osmotic pressure is very high and the permeate volume is a fraction of the retentate. Scale formation on the membrane is a big issue.
The main point is to produce a water that is compatible with the reservoir water at the lowest cost.
The injected water will find its way to the surface as produced fluids. The produced water will need to be de-oiled and disposed of. Typically the water being produced will be more saline that the water injected water and can contain NORM’s and heavy metals like arsenic and strontium.
US warships are close to Venezuela these days. If the US peaks by 2030, it might be tempting to stage a regime change ala Ukraine in 2014 in Caracas.
Hundreds of billions of heavy crude oil in Venezuela such as in the Orinoco Belt waiting to be exploited by international and mainly US petroleum corporations.
Millions of barrels per day shipped to upgraded US refineries and sold for cheap to fuel the US economy while US domestic oil production declines. The Petro-Dollar lives on.
Just a friendly government in place is all that is needed.
PetroSlurp,
Bingo… The U.S. is using the Ancient Roman Empire Business model. Works well when you are able to enslave the foreign state masses with trinkets, etc.
The Global North, mostly the U.S. and Europe extorted $62 trillion of wealth from the Global South between 1960-2017. It seems this business model has another decade or so before the pitchforks come out.
Why stop a Good Thing?
steve
I think all of us in the Western club are secretly glad to see these takeovers. No one wants to see their lifestyle diminished.
China has a big investment in Venz oil industry. We are dependent on trade with China for many critical items. US is not the only strongman in the world any more, in fact you know we are running on fumes, borrowed fumes.
Speaking of living on borrowed money, the US is the largest debtor in the history of the world. It has been a great advantage to have low borrowing costs since WW2 (with the exceptions of times in the 1970’s), an advantage that we have come to take granted as individuals, corporations and country.
It is very possible that our longstanding unparalleled priveledged credit position will be trending downward for decades. Perhaps even likely. The most important of our advantages are wearing thin.
Stop to think what that loss of privileged credit status means for servicing the debt, for funding of government support programs like Medicare or SS, for cost of infrastructure projects. Just how much of the Permian development would have been accomplished with expensive or unavailable credit? What would be the new cost calculation for a nuclear power plant, or a data center. Weaponry, grid projects, an offshore drill rig? Or the cost of a financed home or vehicle.
How many of us, our businesses or states are in a position to live closer to a pay as you go status?
I’m simply saying that if this trend of tight/expensive credit gets legs that none of us should be surprised by the big loss of economic ability. It is even possible under certain scenarios that credit markets can become frozen, and for a very long time.
Saying fuck off to allies and neighbors is a massive voluntary error ingredient to add to the mix, unfortunately. If it was me, I’d be looking hard for more reliable partners with which to do business, and I certainly wouldn’t forget.
Hickory
Attached is an article that says the US in exchange for its $ being the World’s reserve currency must run a trade deficit in order for the World economy to expand. It is also why the $US had to be broken from the Gold standard because not enough gold was being mined to print new dollars.
This to me implies as the US reduces its trade deficit, the World’s economic growth will slow.
“The Triffin dilemma
The persistent global demand for safe US dollar assets feeds America’s exorbitant privilege, but the quid pro quo is America must let capital flow freely across its borders and readily absorb the savings and current account deficits in other countries. In 1959, Robert Triffin predicted that the nascent USD-gold standard was unsustainable because of an insurmountable dilemma: if America stopped providing other countries with US dollars, global trade would stagnate, tipping the world into a contractionary spiral. But if it continued, America’s foreign liabilities would exceed its gold stock, eroding confidence and eventually leading to a run on US gold. Herein lies the Triffin dilemma.
America still faces a modern-era Triffin dilemma between satisfying the increasing demand for safe US dollar assets by the rest of the world and maintaining their safety. However, as the US share in world GDP continues to trend down and the global financial wealth outside the US continues to expand, will America’s USD assets still be deemed safe? Highlighting this challenge is the widening gulf between US international financial liabilities and assets.”
I would like to hear from some economists on their thoughts on the Triffen Dilemma. I wonder if any of T’s advisors are aware if this dilemma and the consequences of their new policies.
https://www.nomuraconnects.com/focused-thinking-posts/trumps-populist-policies-and-the-triffin-dilemma/
Ovi,
The Eurodollar for the most part negates Triffin’s dilemma. Banks outside the US create most of the dollar liquidity needed to trade and finance whatever is needed. Sometimes they choose not to provide dollar liquidity depending on circumstances but the US isn’t the center of the global dollar distribution system.
Dollar leaving the US through trade only helps there be more dollar liquidity.
Most of what we are told about the dollar is incorrect. Dollars value is determined by what goes on outside the US in the Eurodollar market. Not by the stuff happening within the US.
If things are bad in Europe or say China. Banks decide they don’t want to lend dollar into Europe or China. The dollar will rise against them.
Interest rates differentials really don’t matter. Central banks cutting interest rates don’t really matter. Nobody is going to go out and borrow and spend a bunch of money just because central banks cut rates.
At the end of the day. Lots of economic activity leads to a weaker dollar. Because money is loaned into existence through economic activity. Money is also extinguished through economic activity via debt repayments.
If economic activity outside the US contracts then the dollar’s value goes up. It’s that simple.
If the US isn’t importing goods and services from the rest of the world. That means less economic activity outside the US.
The one thing that does have a lot of weight on the dollar inside the US is when the Treasury is either spending money out of the TGA or is refilling the TGA via debt sale. Selling a bunch of US treasuries does in fact suck up dollars. But as the treasury spends those dollars go back into the economy.
Less oil will most certainly mean less economic activity. Those countries who are most dependent on imports will see their currencies crash against the dollar as economic activity goes away.
The current run up of the Euro against the dollar is Europe as a whole spending large sums on defense and supposedly buying more oil and gas from the US. So Eurodollars are chasing this government spending driving the Euro higher against the dollar. It’s economic activity that’s being chased.
If the US were to ban oil and gas exports the Euro would crash unless they replaced those imports somewhere else. Got to have energy to have economic activity.
HHH
Welcome back. Thanks for the clarification and counter view/perspective.
What are your thoughts on these US tariffs. Will the end result be a slowing World economy?
Ovi,
My thoughts on the tariffs are, so far they are just mildly deflationary at best. The real deflationary wave that is coming is because everyone front loaded the tariffs.
Record volume coming through ports. We have a glut of inventory. And the job market is shaky.
Companies are stuck with a whole lot of inventory and consumers are tapped out and facing job losses.
Companies won’t be able to pass on higher prices. Which means margins will be taking a hit. So the stock market will be caught between lower interest rates which historically have been good for stocks. And bad data which means lower interest rates.
Bonds will be bought aggressively as the FED gets out of the way and cuts interest rates. As long as banks keep lending, making new loans, creating new money. Asset prices are going up. Because share buybacks will be the only way for companies to look like they are doing well.
Meanwhile the same companies will be slashing jobs and the demand side of things will crumble. Think most fast food restaurants in the US are really starting to see traffic and sales drop. Particularly breakfast items as more and more people are cutting their spending.
Interest rate cuts and QE the so called monetary levers don’t put money in people’s pockets. The question is will government spending be enough to keep us out of an official recession.
In China the monetary levers and government spending isn’t working. China needs demand in the US and Europe to pick up to pull them out of this slump. And it’s just not going to happen.
Only thing going right for China at the moment is the stock market is booming. But it’s booming for all the wrong reasons. There is just no other place for money to go. Since real estate has lost its shine.
There’s a new business in the West US, called BuyWander.Com, with pick-up locations opening it seems every few weeks. These guys resell returns and overstock from Amazon, Target, Walmart, and a few other stores. They’ll auction stuff off starting at $1.00, several days a week. Brand new $10 dehumidifiers, $40 high-end air conditioners, $3 car parts, the variety is interesting to see. The nice thing about BuyWander is that bids are not legally binding – if you fill a cart with reserved items, and let five days go by, it goes back to the auction stock. It’s apparently more cost effective to just route returns/overstock to these guys on huge pallets and let them deal with it. Best way to operate is if you see something you want that’s actually quite expensive, have a separate account (they isolate by phone #’s) – just bid the MSRP on the item and if no-one bids to a tolerable cost, check out and pay for it. (e.g. Flooring worth $2000 … bid $2000, if highest other bid is $50, go ahead and cash out for $51 – otherwise wait and try again.)
Another thing I noticed is one can see what’s getting bid on, allowing a glimpse into what others find important and it’s often the dumb stuff getting surprisingly high activity. The US is sick.
“Global observed oil inventories rose for the fifth consecutive month in June, up 28.1 mb m-o-m, or almost 900 kb/d, to reach a 46-month high of 7 836 mb. The increase was underpinned by swelling volumes of oil on water, and rising stocks of both Chinese crude and US gas liquids, while other inventories mostly declined. OECD”
https://www.iea.org/reports/oil-market-report-august-2025
When looking at inventories we really need to look at global stocks as OECD does not include some major oil consuming and processing countries.
More countries are realising they need to increase storage facilities in times of uncertainty.
Note that World Oil demand is about 103 Mb/d of liquids and typically we look for a 90 day stock for liquids which suggests a target of 9270 million barrels for liquid stocks to meet the 90 day of forward supply target. The 7836 million barrel estimate is 1434 million barrels short of the target at about 76 days of 2024 average demand.
The stock estimates tend to be very bad for the Non-OECD.
DC,
we are approaching a point where “total liquids” is becoming a really confusing metrics. It used to be a good proxy for crude, but now NGLs are growing much faster than crude and are starting to cloud the picture in a big way… And then we have biofuels: some agencies include them, some don’t…
Needless to day that a bbl of propane or ethane is an entirely different animal than a barrel of crude oil, in so many aspects…
Kdimitrov,
I agree total liquids by volume is a very poor measure of energy, at minimum we should measure by mass which would mirror energy content more closely or measure in exajoules. This is why I focus on crude plus condensate, but we don’t have good data on global stock levels of crude plus condensate and the major products produced from crude (gasoline, diesel, jet fuel, and residual fuel).
DC
Who looks for 90 days?
There are over 200 countries in the world and many have practically no storage at all.
Companies who are in the business say various countries are building and extending storage.
https://www.grandviewresearch.com/industry-analysis/oil-storage-market
Iver,
Most OECD nations and many non-OECD nations aim for this target. This includes both strategic stock piles held by governments plus commercial stocks on both on land and on water. The target is not always met and non-OECD stocks are more difficult to track.
In the post I presented a set of tight oil scenarios based on a medium tight oil scenario from February 2019. The following is a revised scenario based on my more recent best guess scenario and the ERR for the high and low scenarios is based on the F5 and F95 USGS assessments for Permian, Bakken, and Eagle Ford and my own guesses for the rest of the US tight oil (excluding 3 biggest plays). My expectation is about a 90% probability that US tight oil output will fall somewhere between the low and high scenarios in the chart below. My best guess is the medium scenario which I believe has an equal probability that output will be either higher or lower (F50). About 31 Gb of tight oil was produced from 1995 to 2024.
DC
Can you do a similar graph for Iraq.
Iraq has between 130 and 160 Gb of oil reserves and what happens there would have massive impact on global decline rates.
The first phase of the common seawater supply project is due to open in 2028 and various other upgrades should start producing in a couple of years also.
Iver,
I don’t have much information on Iraq to predict future output and their reserve numbers are suspect. In 1983 Iraq’s proved reserves were 65 Gb and increased to 100 Gb in 1987 and to 149 Gb in 2016. Rystad’s 2024 estimate is about 106 Gb for recoverable resources for Iraq (this includes future discoveries and reserve growth, so called 2PCX resources). Iraq’s proved reserves are 31 Gb, 2P reserves are 58 Gb, 2PC resources are 100 Gb and 2PCX resources are 106 Gb. Not clear where you are getting 160 Gb. Note that the engineer’s best guess is the 2P reserve number of 58 Gb at the end of 2023 for Iraq, that is the number I would use for my best guess with about 36 Gb for an F95 estimate (95 % chance recoverable oil is more than 36 Gb) and about 86 Gb for an F5 estimate (5% chance that recoverable oil resource will be more than 86 Gb).
Note that Iraq produced 50 Gb of C plus C from 1960 to 2023 so total URR is likely to be about 108 Gb for Iraq (roughly 2 times less than the 200 Gb number sometimes cited). If we assume peak occurs at about 50% of URR then Iraq may be very close to peak output as they are at about 48% of URR at end of 2024 and will be at 50% of URR at the end of 2025. For Iraq’s URR, F95 would be about 86 Gb and F5 would be about 136 Gb and F50 about 108 Gb.
DC
EIA quotes Iraq as having 145 billion of proved reserves.
This article explains that large areas of Iraq with promising geology has not been drilled and could hold much more then that.
https://www.eia.gov/international/overview/country/irq
There are estimates of up 300 billion barrels due to the fact that Iraq has the right geology and is the least explored of the oil rich countries. The Brookings article gives an idea of the utter chaos in that country with the obvious wars and corruption.
https://www.brookings.edu/articles/how-much-oil-does-iraq-have/
160 billion is on the lower side of all of these assessments. Only once professional oil companies have conducted surveys and confirmed with test wells will we have any idea what oil is there.
Iver,
Check proved reserves history at following link https://www.energyinst.org/statistical-review
The 145 Gb estimate is often used based on what Iraq claims for “proved reserves”. That is not a good estimate for proved reserves see link below
https://www.datocms-assets.com/75979/1721912122-slide1.jpg?fm=webp
Generally Rystad’s estimates are quite optimistic 2P reserves are proved plus probable reserves which are the F50 estimate with an equal chance reserves might be higher or lower.
Your claim that Iraq has not been thoroughly explored is incorrect, also note that the Brookings article is from 2003 and my guess is that the USGS estimates are far more accurate than the Department of Energy estimates which are often wishful thinking that are very far from the mark. Note also that Rystad is well respected energy analysts and their estimate is from 2024 rather than 2003.
Just because there is a very high estimate does not mean that the estimate is correct.
I stand by my guess, you are welcome to make any guess you wish, but I would not that if wishes were horses then beggars would ride.
DC
It is not my claim, it is a statement by various organisations in the industry who actually drill wells in the ground.
How many exploration wells have been drilled in western Iraq?
Iver,
The article you cited was from 2003, I do not have information on the number of exploratory wells drilled in Iraq. I imagine Rystad has access to many proprietary databases that I do not have access to. I am relying on their expertise and that of the USGS, the US DOE uses mostly economists, not geologists or geophysicists that could evaluate potential resources. Most of the OPEC “proved reserve estimates” are either 2P or 3P reserves. That is what accounts for the jumps in reserves over time since 1980, they just raise their numbers so their quotas will be increased.
DC
The energy institute does not drill any wells.
All that counts is actual seismic surveys and ultimately test wells. Everything else is just guessing.
You say MY claim that much of Iraq has not been explored is wrong, but you can’t provide any evidence to the contrary. What is the point of being condescending and dismissive when you know zero yourself.
Iraq is holding many exploration bidding rounds why? If these areas have already been explored.
https://www.iraq-businessnews.com/2025/08/09/seismic-survey-contract-signed-for-al-qarnain-exploration-block/
Various articles gradually build up a picture of what is going on.
Many areas are being seismically surveyed that have not been before after that test wells will be drilled if the surveys look promising.
https://www.crescentpetroleum.com/2025/04/10/6037/
Iver,
The Energy Institute gathers data from exploration that has occurred, one does not need to drill a well themselves to report on what others have done. These expensive databases are what energy analysts from the EIA, IEA, OPEC, Rystad, the Energy Institute, major oil companies, and many others use to evaluate the exploration and discovery that has occurred.
The Energy institute data is very good in my view, the OPEC reports of “proved reserves” are exaggerated, and are not in fact reserves, more likely they are technically recoverable resource estimates, probably with a 5% probability that resources might be larger. Based on Chat GPT about 13 Gb of oil has been discovered in Iraq from 1980 to 2024, mostly small to medium fields. All of the giant oil discoveries occurred by 1980.
You are correct that I have not drilled any oil wells, my guess is that you also have not drilled any wells in Iraq. We have different viewpoints, time will tell which is more correct.
Sometimes no wells are drilled in an area because it is not prospective, not many wells have been drilled where I live because nobody expects to find oil, this may also be the case in the Western Desert in Iraq. If it was worth exploring, it would be explored.
DC SAYS: “Note that Iraq produced 50 Gb of C plus C from 1960 to 2023 so total URR is likely to be about 108 Gb for Iraq (roughly 2 times less than the 200 Gb number sometimes cited).”
WHAT????
PS: What is your favorite drink? I might want to try some.
Maildog,
Often the 2P reserves are considered the engineering best guess, for Iraq 2P reserves are 58 Gb according to Rystad https://energyworld.ro/2024/07/29/world-global-recoverable-oil-reserves-hold-steady-at-1536-billion-barrels-insufficient-to-meet-demand-without-swift-electrification/
cumulative production is about 50 Gb from 1960 to 2023 so this implies a URR of 108 Gb (50 plus 58 Gb). There may be another 48 Gb of contingent resources, reserve growth and undiscovered resources which would bring the total URR to 156 Gb, I doubt the resource is much higher than this the 90% confidence interval would be 81 to 156 Gb with perhaps a 5% probability that the URR will be higher than 156 Gb.
Dennis – I think that you missed my point. Here is a random number – 5846. What is a number that is “two times less”?
It was a new math question/expression for me, but I am only 84.
Maildog,
Got it, poor english by me. Should have said half or 50% rather than 2 times less (or maybe lower by a factor of 2).
Another great post by Mr. Shellman at link below entitled Greater Well Productivity in the Permian
https://www.oilystuff.com/group/engineering-and-geological-discussions/discussion
https://www.hartenergy.com/exclusives/minerals-insider-peak-permian-misguided-conclusion-213907
quite optimistic
Sheng Wu,
Article is behind a paywall for me.
Do you believe the optimistic view is justified for the Permian? Mike has commented on these optimistic stories, the objective data does not support this view in my opinion. See comment below on decreasing productivity in the Permian when normalized for lateral length. Even the optimists at the EIA and OPEC see the writing on the wall regarding future decline in the Permian Basin.
China decouples from US energy as key exports crash to zero.
https://youtu.be/DCquejfz04A
(6 min vid)
Good video JOHN NORRIS. It reminded me of the British campaign against the Berlin Baghdad railway 110 years ago. That rail line threatened to circumvent the Suez canal as the only practical oil shipping route up to Europe, and was probably one of the triggers for WWI. Oil wars go way back it seems.
https://fsd.kopilkaurokov.ru/uploads/user_file_56002ff0b0342/img_user_file_56002ff0b0342_14.jpg
Article from wiki, sometimes useful.
“Funding, engineering and construction were mainly provided by the German Empire through Deutsche Bank … The Ottoman Empire wished to maintain its control of the Arabian Peninsula and to expand its influence across the Red Sea into the nominally Ottoman (until 1914) Khedivate of Egypt, which had been under British military control since the Urabi Revolt in 1882. If the railway had been completed, the Germans would have gained access to suspected oil fields in Mesopotamia, as well as a connection to the port of Basra on the Persian Gulf. The latter would have provided access to the eastern parts of the German colonial empire, and avoided the Suez Canal, which was controlled by British and French interests.
The railway became a source of international disputes during the years immediately preceding World War I Although it has been argued that they were resolved in 1914 before the war began, it has also been suggested that the railway was a manifestation of the imperial rivalry that was the leading cause of World War I.
The US is behaving no different today. It masks it’s intentions well, but the process of imperial rivalry with China is the same. The Leading empire will always contest it’s preeminence.
Thompson
China has an horrendous dictatorship in charge that brutally suppresses and murders any who call for freedom.
https://www.ohchr.org/en/press-releases/2021/06/china-un-human-rights-experts-alarmed-organ-harvesting-allegations
It actively tries to damage the democratic countries around the world via cyber attacks and actual intimidation of people who have fled that country.
https://industrialcyber.co/critical-infrastructure/house-committee-report-highlights-growing-threat-of-chinese-cyber-espionage-intellectual-property-theft/
Do you know what they did to the pro democracy demonstrators in Hong Kong?
Trying to drew some parallel between ww1 and protecting ourselves from dictatorship scum is really beyond the pale.
I very seldom agree with Iver, but I must do so in his argument with Thompson.
Another point, China is in the process of collapse. China alone is responsible for this collapse, but what the US is doing with its trade policy is aggravating the problem.
People here assume I love China, I don’t they are everything people say and more. But they have been that way for thousands of years and no one cared up until a few months ago. Millions of Uyghurs are suffering from unspeakable atrocities at the hands of the Chinese government, have been for a decade and more, but who cared? Who here even knows of that? They were our friendly trading partners, so we turned a blind eye.
I see the same thing happening as when the ukraine conflict started, collective insanity driven by the media, everyone waving flags and obsessed. The same mad fervor like over Iraq 24 years ago, and look at the outcome, look at the Afghanistan outcome.
Try to keep a balanced view is all I say. Try not to let the propaganda drive you into blindness of other motives.
Yes I know IVER, China, your former friendly trading partner is moving outside of the $US system, they are EVIL and must be stopped. Enjoy your war, but just don’t invite us this time ok. We’re sick of traipsing around the globe massacring innocent civilians in the name of freedom.
This post is nothing more than anti China propaganda. China is one of the best functioning countries on the planet.
And I’m not Chinese! I’m just telling how it is. They are a highly capable, industrious, disciplined people that are creating their own future in so many areas. They are winning.
Meanwhile, most Americans other than the super rich are getting poorer every passing year. Just the facts, sir.
China has not bought a single bushel of US 2025 new crop soybeans. Cash markets in some counties are below $9.
This despite soybean prices in Brazil being over $1 higher per bushel than US markets.
This is per Agweb.
Hi Shallow sand,
You had mentioned a few weeks ago that you expected Bakken wells should be able to go for decades.
I would think that many of these wells would require artificial lift after a few years, if a well was down to about 15 bopd output and required a pump replacement and the price of oil was $65/bo at wellhead, would the repair be too expensive and the well would be plugged? What would you expect would be the average life for one of these downhole pumps? I was thinking 10 years or so on average, but have no real world experience with producing oil.
Thanks.
Dennis.
I am probably not a good one to comment on Bakken wells.
Do you happen to have statistics on how many wells in ND have been plugged each year?
I do not know how strict ND is regarding inactive wells.
I assume most Bakken wells will be produced for at least 20-40 years, but as you know, much depends on the price of oil.
I suspect 15 BOPD Bakken wells aren’t very economic at current oil prices. But admittedly I haven’t looked at lease operating statements like I used to.
I did just look at a 12 well package for sale operated by Continental in McKenzie County. Wells completed 2017-2020. Average production last 6 months 300 BOPD and 5,200 MCFPD.
The 100% LOE per well for the most recent month ranged from $4k to $29k. Only two wells were below $11k. Looks like 100% of the LOE for all 12 wells is running around $180-200k per month.
Hope this helps. Again, just 12 wells out of close to 20k now? So a very small sample size.
Thanks for the information Shallow sand. My average well profile for Bakken wells with first flow in 2015 has output at 7.8 bopd at 20 years and expected cumulative output of 17.6 kbo over years 21 to 30. Seems LOE is about $20/bo, royalties and taxes about 27% on average so at $65/bo the net revenue would be about $27.45/bo so about $483k of future net revenue.
It would seem a down hole pump repair of more than $483k would be a bad investment and a pump failure might result in the end of life for the well at the current oil price. I don’t know how much such a repair would cost (chat GPT says an ESP pump would be in the 150 to 350k range to replace) so if LOE is as low as you research indicates such a repair would break even at 350k, but I imagine would not be worth the risk, perhaps if the pump replacement is only 150k the repair might be worth doing. I also don’t know how often the pumps need replacement, rod pumps are cheaper at about 90k per repair, but need work more often than ESP pumps.
No idea what is commonly used in Bakken wells, nor do I know how long rod pumps or ESP pumps tend to last in the Bakken/Three Forks. Chat GPT says rod lift is used late in the well life so those numbers are what should be used and they claim for Bakken Horizontal tight oil wells pumps are replaced or repaired every 2.5 years. So over 10 years that is 4 pump jobs costing a total of 360k, yikes, seems Mike Shellman’s assessment that these wells no longer pay out at under 10 bopd is spot on unless oil and natural gas prices are very high. Also possible that LOE per barrel will tend to increase for lower flow wells, also possible that well pumps may last longer as pumping rates decrease and wells may be cycled on and off reducing run time. You would know far more than me.
Yet another great post by Mr Shellman entitled 2024 Well Productivity, Normalized for Lateral Length at link below
https://www.oilystuff.com/group/engineering-and-geological-discussions/discussion
an excerpt
When normalized for lateral length, 2024 & 2025 production profiles in the entire Permian Basin tell us a way different story. We see what things are going to look like in the future when they run out of room to stuff ultra long laterals into an already overcrowded dance floor. That will happen, way sooner than people think. It is so crowded now in the cores the sector is drilling horseshoe laterals in undrilled sections.
When lateral length is “standardized” with other wells in the Basin, 2024 (and those wells drilled to date in 2025) are effectively the least productive wells in Permian history.
chart below also from Mike’s blog, better resolution at http://www.oilystuffblog.com. Dashed line on chart is the average of all Permian wells with first flow from Jan 2016 to July 2025.
Bottom line is that when normalized for lateral length, the average Permian well’s productivity has been decreasing since 2016. Technology only gets you so far, depletion always wins. Click on chart to make it bigger.
There’s a new business in the West US, called BuyWander.Com, with pick-up locations opening it seems every few weeks. These guys resell returns and overstock from Amazon, Target, Walmart, and a few other stores. They’ll auction stuff off starting at $1.00, several days a week. Brand new $10 dehumidifiers, $40 high-end air conditioners, $3 car parts (Caterpillar radiator, reg. Retail $3500, sold for $6), the variety is interesting to see. The nice thing about BuyWander is that bids are not legally binding – if you fill a cart with reserved items, and let five days go by, it goes back to the auction stock. It’s apparently more cost effective to just route returns/overstock to these guys on huge pallets and let them deal with it. Best way to operate is if you see something you want that’s actually quite expensive, have a separate account (they isolate by phone #’s) – just bid the MSRP on the item and if no-one bids to a tolerable cost, check out and pay for it. (e.g. Flooring worth $2000 … bid $2000, if highest other bid is $50, go ahead and cash out for $51 – otherwise wait and try again.) Returns are a pinch as well, just say it isn’t quite as advertised they don’t even care about the condition – practically junk to begin with.
Oil companies exploring for oil in Iraq.
https://www.reuters.com/business/energy/chinas-cnooc-signs-oil-contract-develop-iraqs-block-7-2024-10-30/
https://www.reuters.com/business/energy/chinas-independent-oil-firms-elbow-into-iraqs-majors-dominated-market-2025-08-04/
https://www.reuters.com/business/energy/iraq-signs-agreement-with-chevron-oil-exploration-projects-prime-minister-says-2025-08-19/#:~:text=CAIRO%2C%20Aug%2019%20(Reuters),prime%20minister%20said%20on%20Tuesday.
Obviously these oil companies think there is a good chance of discovering new oil reserves which will boost the amount of reserves in Iraq. There are huge areas still to be explored. I guess DC will not bid for any of the blocks coming up.
If The government of Iraq can maintain security then there is some chance oil production will reach 6mb/d by 2029.
Iver,
There have been claims that Iraq’s oil output will be 7 Mb/d by 2029, but much depends on water treatment facilities being built to sustain pressure in their giant oil fields. Iraq has been working on this since 2011, currently they intend to finish phase one by 2028 (5 of 12.5 Mb/d of seawater capacity completed). The exploration will be of little consequence without finishing the CSSP (Common Seawater Supply Project). Lack of pressure in Iraq’s giant oil fields due to lack of water injection capacity is a major problem for Iraq’s Oil Industry.
Link below to an article from 2018
https://www.meed.com/iraq-faces-tough-choices-critical-water-injection-project/
Link below has some of the more optimistic estimates for Iraq, to me these seem far fetched middle east exaggeration. In 2013 Iraq was claiming they could reach 13 Mb/d by 2017, I didn’t believe that then and continue to believe they are unlikely to reach even 6 Mb/d, perhaps they will surpass their previous 12 month average peak of 4754 kb/d in 2019. More recently (in 2022) their 12 month peak was about 4500 kb/d, they may struggle to get above 4500 kb/d until the CSSP is completed.
https://tankterminals.com/news/iraq-looks-to-finish-phase-1-of-cssp-oil-megaproject-by-2028/
DC
If you had read by previous post the contracts for The Common Seawater Supply Project have now been signed.
https://totalenergies.com/company/projects/gas/ggip-multi-energy-project-Irak
https://oilprice.com/Energy/Crude-Oil/Is-China-Moving-Into-Position-To-Take-Over-Iraqs-Key-Oil-Project-From-The-West.html
A sensible split with Totalenergies building the plant and the Chinese building the pipeline system.
Previous contracts were poorly drawn up and the companies could not work together, the new contract clearly separates responsibilities.
As posted above there are many oil companies going into Iraq, perhaps none of them know what they are doing
Iver,
Contracts have been signed before, we will see if the project eventually gets completed after 20 years or so (possibly by 2030). Companies will take risks, sometimes they pay out, sometimes not. I think the odds are low we will see a 12 month average output of 6000 kb/d by 2029 in Iraq, my guess would be about a 25% probability.
DC
As you said you don’t know much about Iraq.
Iver,
We will see how accurate my guess is in the future. Iraq has produced 50 Gb of C plus C over the past 65 years and 45 Gb from 1973 to 2024. I stand by my guess of 106 Gb (Rystad’s 2PCX estimate) for Iraq’s URR for C plus C, with a 90% confidence interval of 50 to 160 Gb.
There was a comment above pertaining to Bakken wells —-
The shale matrix in the Bakken and Three Forks benches is among the tightest in the world. This makes it more refractory to spiderweb fractures and susceptible to fractures along a path of lesser resistance: horizontal bedding planes. Many of the older wells received low-volume, low pressure frack jobs. On average, because of these features, these tight shale benches give up <10% of the OOIP. Enhanced oil recovery using CO2 is supported by a richly-established infrastructure in the Permian, but not in the Bakken. Pilot studies by Chord and Hess show that the tighter shale is well re-pressured by CO2 injection, and also that it replaces oil hydrocarbons in small pores, as well as dissolving in the remaining oil, "swelling" it, which drives oil up the wellbore. Indeed, it would appear that EOR by CO2 injection was made for the Bakken. This has been greatly aided by the OBBBA, which puts CO2 utilization on parity with sequestration. The chokepoint of associated gas in a rising GOR environment in the Bakken will soon be relieved by the East Bakken Pipeline. Some (estimated at 10%) of the Bakken wells will be refrack candidates. Thousands though, will be candidates for EOR, using ethane-rich gas or CO2. Combined, this could potentially extend the production plateau for several years. Production will dip for a few months, until prices pick up and an EOR network is put into place. The producers in N. Dakota are of the highest quality and I believe they have faith in their future.
Further, it is obvious from reading these pages and those written by objective deep neural networks that the price of oil and gas must rise to be profitable enough for aggressive maneuvers. Today, oil is grotesquely undervalued (due to being an inelastic commodity). For example, an ounce of gold usually will buy between 6 and 10 barrels of oil. Today, an ounce of gold will buy you a whopping 55 barrels of oil. Historically, this ratio has always corrected. I see no pressure on the pricing of gold, so a "correction" would mean oil is going up. Additionally, American natural gas is currently selling domestically at a 75% discount to world gas prices. This is almost entirely related to the rising GOR in lower tier geology and also to the massive population of aging wells. In a nutshell, associated NG is ruining the domestic market at this time. Some say this is the new new, that flagging demand is killing oil and gas, but the demand continues to be robust.
Something has to give, and it will. The Permian is drowning in its own produced water (6:1) and its massive associated gas cut has vaporlocked the grid selling into the WaHa Hub. In the Bakken a rising level of associated gas has had no place to go. If the pilot studies from the Bakken are basin-wide representative, this old basin stands to hold its own for several more years.
Gerry,
Thanks. Has there been much use of EOR in the Bakken/Three Forks, sounds expensive?
Just pilot projects. They have no infrastructure for it, whereas there is extensive infrastructure for CO2-injection EOR in the Permian. It likely won’t become very routine in the Bakken until prices lift.
Gerry,
EOR is also not used much in the Permian for tight oil except a few pilot projects, some day prices might be high enough to justify EOR, not clear what price that would be.
Right you are, but under the OBBBA, the federal government will now pay $85 per ton of CO2 used for EOR, the same as for simple sequestration. In my opinion, at scale, the result could be enough to influence the curve of your graphs. At the very least it’s going to be interesting to see the effects of vast amounts of CO2 pumped into a previous tier-1 cluster of wells that have now entered terminal decline. Until now there has been little financial incentive to do this. Even now, the pay is not like hitting a monster well selling oil into a hundred-dollar-per-barrel market but should be adequate, if it works, to promote a massive EOR industry in hundreds of thousands of wells. The point I was initially trying to make was that this seems to work quite well in the Bakken, where the shale matrix is very tight, but there is no infrastructure. The Permian has the infrastructure, and also a huge population of old tier-1 wells that are in the death knell. There the shale is not as tight, and there is tremendous vertical and horizontal communication between densely drilled wells in the Permian, so CO2 injection may not work as dramatically, but we’ll have to see. To an operator of thousands of wells, now drilling and fracking at breakeven prices, this might look like a good place to slow drilling and devote some time to EOR, let the prices adjust. I get the sense that EOR is coming soon, and that soon thereafter will come a refracking wave–which will work in perhaps 5-10% of old wells, probably selected by deep neural networks and machine learning after digesting millions of input factors. As a matter of fact, I think this payola was inserted in the OBBA in order to combat the coming slowdown, which is now upon us.
Thanks Gerry,
Not sure as an investor I would want to depend on the Federal Government to maintain its subsidies as these change like the wind. It will be interesting to see if there is much of an increase in EOR activity in Texas. I suppose the State of Texas could step in if subsidies from the Federal government lapse.
New posts are up
https://peakoilbarrel.com/short-term-energy-outlook-august-2025/
and
https://peakoilbarrel.com/open-thread-non-petroleum-august-29-2025/