Rystad Energy’s latest report has unveiled that global recoverable oil reserves have held steady at around 1,500 billion barrels. This figure marks a decrease of 52 billion barrels from the previous year, mainly due to a year’s worth of oil production and downward adjustments in new discoveries.
The report underscores a critical shift in the global energy landscape: the push towards electrification and energy transition is profoundly impacting oil reserve estimates and industry dynamics. While Saudi Arabia has revised its reserves downward, focusing now on onshore drilling rather than offshore expansion, Argentina has seen a notable increase in its reserves due to advances in the Vaca Muerta shale formation.
The stability in global oil reserves highlights an underlying challenge: the world’s remaining oil resources may not be sufficient to meet future demand if there is no substantial shift towards electric vehicles (EVs). The report suggests that the only viable way to limit global temperature rise to under 2.0 degrees Celsius is through rapid electrification of road transportation.
Per Magnus Nysveen, Head of Analysis at Rystad Energy emphasizes the urgency, “The current oil reserves may not support future demand if we do not transition to electric vehicles. The key to mitigating climate impact lies in accelerating the shift towards electrification.”
In a scenario where oil prices remain high, global production could peak around 2035 at 120 million barrels per day (bpd), before declining to 85 million bpd by 2050. However, the report also projects a more realistic outlook where production peaks in 2030 at 108 million bpd and falls to 55 million bpd by 2050. This scenario anticipates that about one-third of the world’s recoverable oil—approximately 500 billion barrels—could remain unexploited due to economic unfeasibility.
The report reveals that since 2019, estimates of recoverable oil resources have decreased by 700 billion barrels, driven largely by reduced exploration activities and the global shift towards electrification. The ongoing electrification trend and anticipated drop in oil demand and prices have led to decreased exploration and investments in new oil projects.
Furthermore, the study points out discrepancies in reported oil reserves. OPEC members collectively hold 657 billion barrels, significantly less than the 1,215 billion barrels reported by the BP Statistical Review 2022. This discrepancy is attributed to overreporting by several countries, including Venezuela, Iran, Libya, Kuwait, and Canada.
Rystad Energy’s report highlights the pressing need for an accelerated transition to electric vehicles to manage climate change effectively. The stability in oil reserves amid shifting industry dynamics serves as a reminder of the urgent need to embrace electrification and sustainable energy practices to ensure a manageable climate impact.
