Jan 12, 2026
Global upstream capital expenditure is expected to decrease again in 2026 due to low oil prices.
Last year, upstream oil investment was anticipated to have fallen by 2.5% year-on-year to $420 billion, as low oil prices pressured producers and hampered expansion plans. Companies in the sector continued to emphasize profitability, free cash flow, and debt reduction rather than aggressive production growth, a tendency that was further reinforced by macroeconomic uncertainties. The decline was also attributed to decreased spending by U.S. independent light tight oil and shale producers, while national oil companies (NOCs) in the Middle East raised their investments, and spending on traditional projects proved to be more stable.
Energy analysts at Wood Mackenzie are now forecasting that these trends will persist this year. They predict that global upstream operators will reduce investment for a second straight year in 2026, with capital expenditure expected to decrease by at least 2-3% year-on-year and over 5% compared to 2024, as the industry adapts to sub-$60/bbl oil prices while focusing on long-term viability. Declines in North America and Europe will counterbalance increases in Africa, Latin America, and the Middle East.
Despite these challenges, non-OPEC liquids and global gas supply are projected to grow by approximately 1.5% each. Brazil, Guyana, and Argentina are expected to be significant contributors to non-OPEC oil supply growth in 2026, representing half of the anticipated increase of 0.8 million barrels per day (b/d) predicted by the U.S. Energy Information Administration. According to the EIA, Brazil's growth will largely come from new offshore pre-salt projects, including the launch of Equinor’s Bacalhau field in October and two additional floating production storage and offloading (FPSO) units by Petrobras in December, leading to a projected increase of 0.2 mb/d in Brazil’s production to 4.0 mb/d.
In Guyana, the rapid development of the Stabroek Block by Exxon Mobil and its partners is driving production to record levels, with the potential to exceed 1 million barrels per day (bpd) as new FPSOs (Yellowtail, Uaru, Whiptail) commence operations. Exxon’s Yellowtail project has already reached full production, elevating Guyana’s output to over 900,000 b/d. Guyana is increasingly exporting crude to Asian markets.
Furthermore, the Uaru project, set to begin in 2026, will contribute an additional 250,000 b/d of supply, pushing Guyana’s crude oil production past 1.0 million b/d by 2027.
The EIA also anticipates substantial production growth in Argentina for 2026, primarily attributed to its vast Vaca Muerta shale reserves. Argentina’s oil production is projected to average 810,000 b/d in 2026, an increase from 740,000 b/d in 2025 and 670,000 b/d in 2024.
Previously, Rystad had forecasted that oil from offshore Brazil, Guyana, Suriname, and Argentina’s Vaca Muerta shale play would be crucial sources of cost-competitive non-OPEC oil supply through 2030. They estimated that global liquids demand would peak in the 2030s at approximately 107 million barrels per day (bpd), plateauing above 100 million bpd into the 2040s before declining to around 75 million bpd by 2050. According to the Norwegian energy consultancy, non-OPEC+ supply will play a vital role in balancing the global market, with inexpensive oil from South America offsetting slower growth in U.S. shale. Non-OPEC+ producers are predicted to account for around 5.9 million bpd, or nearly 60%, of new conventional oil currently being developed through 2030, with South America being the main source of this growth at 560,000 bpd of crude and condensate, and North America contributing roughly 480,000 bpd.
The EIA projects a slight decline in U.S. oil production in 2026 after years of growth, with output expected to average around 13.5 million bpd, down about 100,000 bpd from 2025, as gains in the Permian Basin, Alaska, and the Gulf of Mexico are balanced by declines in other regions. This indicates a plateau in production, influenced by falling oil prices and an oversupply in the global market.
Simultaneously, Wood Mackenzie forecasts that global gas investment will rise by 7% in 2026, even as total oil investment is predicted to decrease. This increase is linked to the launch of new LNG projects, mainly in the United States, Canada, and Qatar, which are expected to enhance both supply and demand. Overall, the prevailing view among analysts such as Wood Mackenzie and Fitch Ratings is that global oil and gas companies will maintain capital discipline and may reduce overall spending in 2026 due to oil price fluctuations and oversupply concerns. Total upstream spending among the seven major oil companies is expected to remain relatively stable compared to previous years.
Energy analysts at Wood Mackenzie are now forecasting that these trends will persist this year. They predict that global upstream operators will reduce investment for a second straight year in 2026, with capital expenditure expected to decrease by at least 2-3% year-on-year and over 5% compared to 2024, as the industry adapts to sub-$60/bbl oil prices while focusing on long-term viability. Declines in North America and Europe will counterbalance increases in Africa, Latin America, and the Middle East.
Despite these challenges, non-OPEC liquids and global gas supply are projected to grow by approximately 1.5% each. Brazil, Guyana, and Argentina are expected to be significant contributors to non-OPEC oil supply growth in 2026, representing half of the anticipated increase of 0.8 million barrels per day (b/d) predicted by the U.S. Energy Information Administration. According to the EIA, Brazil's growth will largely come from new offshore pre-salt projects, including the launch of Equinor’s Bacalhau field in October and two additional floating production storage and offloading (FPSO) units by Petrobras in December, leading to a projected increase of 0.2 mb/d in Brazil’s production to 4.0 mb/d.
In Guyana, the rapid development of the Stabroek Block by Exxon Mobil and its partners is driving production to record levels, with the potential to exceed 1 million barrels per day (bpd) as new FPSOs (Yellowtail, Uaru, Whiptail) commence operations. Exxon’s Yellowtail project has already reached full production, elevating Guyana’s output to over 900,000 b/d. Guyana is increasingly exporting crude to Asian markets.
Furthermore, the Uaru project, set to begin in 2026, will contribute an additional 250,000 b/d of supply, pushing Guyana’s crude oil production past 1.0 million b/d by 2027.
The EIA also anticipates substantial production growth in Argentina for 2026, primarily attributed to its vast Vaca Muerta shale reserves. Argentina’s oil production is projected to average 810,000 b/d in 2026, an increase from 740,000 b/d in 2025 and 670,000 b/d in 2024.
Previously, Rystad had forecasted that oil from offshore Brazil, Guyana, Suriname, and Argentina’s Vaca Muerta shale play would be crucial sources of cost-competitive non-OPEC oil supply through 2030. They estimated that global liquids demand would peak in the 2030s at approximately 107 million barrels per day (bpd), plateauing above 100 million bpd into the 2040s before declining to around 75 million bpd by 2050. According to the Norwegian energy consultancy, non-OPEC+ supply will play a vital role in balancing the global market, with inexpensive oil from South America offsetting slower growth in U.S. shale. Non-OPEC+ producers are predicted to account for around 5.9 million bpd, or nearly 60%, of new conventional oil currently being developed through 2030, with South America being the main source of this growth at 560,000 bpd of crude and condensate, and North America contributing roughly 480,000 bpd.
The EIA projects a slight decline in U.S. oil production in 2026 after years of growth, with output expected to average around 13.5 million bpd, down about 100,000 bpd from 2025, as gains in the Permian Basin, Alaska, and the Gulf of Mexico are balanced by declines in other regions. This indicates a plateau in production, influenced by falling oil prices and an oversupply in the global market.
Simultaneously, Wood Mackenzie forecasts that global gas investment will rise by 7% in 2026, even as total oil investment is predicted to decrease. This increase is linked to the launch of new LNG projects, mainly in the United States, Canada, and Qatar, which are expected to enhance both supply and demand. Overall, the prevailing view among analysts such as Wood Mackenzie and Fitch Ratings is that global oil and gas companies will maintain capital discipline and may reduce overall spending in 2026 due to oil price fluctuations and oversupply concerns. Total upstream spending among the seven major oil companies is expected to remain relatively stable compared to previous years.