Lower oil prices and expectations for demand are set to lead to a decline in oil drilling and production in 2025. The International Energy Agency (IEA) writes in an analysis published on Thursday.
Specifically, the agency expects investments to fall by six percent in 2025. This is the first time since the corona crisis in 2020 that investments in oil drilling and production will fall. It is also the largest decline since 2016.
Based on company announcements, the IEA had initially expected that investments in the search for and production of oil and gas in 2025 would be at the same level as in 2024. But since then, the oil price has come under pressure, it says.
The IEA expects that expenses for gas fields will be at the same level as in 2024, while expenses for oil production are expected to fall. This means that the IEA expects that a total of $570 billion will be spent on drilling and producing oil and gas. This corresponds to over 3,700 billion kroner and is a decrease of around four percent.
The report also assesses that investments in expanding the electricity grid will have difficulty keeping up with increasing demand.
Every year, $400 billion, corresponding to just over 2,600 billion kroner, is spent on the electricity grid. In comparison, more than twice as much money is spent on the production of electricity.
According to the IEA, keeping up with increasing demand will require a major increase in spending. However, this is hampered by long permit procedures and supply chains for transformers and cables that cannot keep up.
In addition, the finances of many utility companies are poor. This is especially true in developing economies, the assessment says.
/ritzau/
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