After Years of Buybacks, Big Oil is Drilling Again

Core Viewpoint - Oil supermajors are shifting focus from returning cash to shareholders to prioritizing growth, as oil and gas will remain essential for decades contrary to previous expectations [1] Group 1: Demand Predictions - Analysts have long predicted a decline in oil and gas demand, particularly due to the anticipated rise of electric vehicles and renewable energy sources [2] - The widespread adoption of electric vehicles has primarily occurred in China, supported by subsidies, but has not led to peak oil demand there, only a slowdown in demand growth [3] - The International Energy Agency revised its prediction that crude oil demand growth would peak before 2030, indicating a significant shift in the outlook for Big Oil [4] Group 2: Industry Response - Analysts suggest that investors are likely to prioritize growth over distributions moving forward, with a focus on expanding oil reserves to increase production despite forecasts of oversupply [5] - The issue of reserve replacement had been sidelined as supermajors attempted to transition to low-carbon energy, but the long-term viability of oil and gas has brought this issue back into focus [6]