BAKU, Azerbaijan, June 17. Global upstream oil and gas investment is expected to decline by 4% to $565 billion in 2025, led by reduced spending from U.S. independent shale producers, according to the latest outlook from the International Energy Agency (IEA), Trend reports.
Oil investments are projected to fall by nearly 6% to $420 billion, while gas-related spending is set to rise 3% to $145 billion. The IEA attributes the decline to ongoing financial caution in the sector, combined with oil price volatility, market uncertainties, and growing capital discipline across companies.
Despite nominal capital expenditure (capex) remaining high — 2023 to 2025 levels are the strongest since 2015 — real-term spending continues to lag pre-pandemic levels. Firms are now prioritizing profitability over aggressive expansion, focusing on low-cost, high-return basins such as West Africa, deepwater Latin America, and the U.S. Gulf of Mexico.
The report highlights that while private companies are reining in spending, national oil companies (NOCs) in the Middle East and Asia are ramping up investments. In 2024, Saudi Aramco increased its upstream capex by 19% to $39 billion, and ADNOC plans to boost crude capacity to 5 million barrels per day by 2027, with a $150 billion investment over four years.
Meanwhile, capital expenditures by U.S. shale operators remain below pre-COVID levels. Although well productivity gains have saved the sector an estimated $220 billion since 2014 — including $60 billion in 2024 alone — lower oil prices and cost deflation continue to constrain full investment recovery.
