BAKU, Azerbaijan, March 12. The long-term outlook for oil supply will be significantly shaped by financial market dynamics, with high interest rates and evolving investor preferences adding pressure to the sector, Trend reports via the Gas Exporting Countries Forum (GECF).
GECF notes that rising capital costs and risk aversion among investors have slowed the pace of new oil capacity development, further constraining future supply. “High interest rates and shifting investor preferences, amid uncertainties in the energy transition, have increased the cost of capital for oil projects. Investors are now demanding higher returns to compensate for risks associated with long-cycle projects,” the organization stated.
As a result, supply limitations are expected to put upward pressure on oil prices. GECF projects that the real Brent crude oil price (base year 2023) will average $80 per barrel during 2023–2030, increase to $85 per barrel in 2030–2040, and reach $90 per barrel in 2040–2050. These price levels reflect a combination of tight supply conditions and evolving demand patterns, reinforcing the structural shifts shaping the oil market.
Despite these challenges, GECF anticipates that the oil market will adapt to the changing energy landscape, maintaining a balance between sustained investment needs and the realities of an energy transition. The organization underscores that oil will remain a critical component of the global energy system, even as transformational shifts redefine its role in the future.
