Crude Oil Resources Under Climate Stringent Scenarios: Production Under Contract and Probabilistic Analyses of Exploratory Frontiers

This study analyzes the crude oil supply in 2030 and 2050, comparing it with demand scenarios from the UN Intergovernmental Panel on Climate Change and the International Energy Agency. It focuses on the oil under production or development as of today (or the supply already under contract), and the oil frontiers. For that, it firstly evaluates a database of over 107,000 assets to identify and classify recoverable oil volumes through 2050. By comparing the supply and demand, this study identifies scenarios requiring production declines or, in opposition, the development of new projects and exploratory frontiers. The focus is on 2030 and 2050, which are key milestones in the global climate agenda. As an original contribution, the analysis also identifies how oil supply regions position themselves regarding oil quality, production costs, and the GHG emission intensity of the oil offered. As the second contribution, this study develops the probability assessment of recoverable resources to evaluate a typical oil frontier, analyzing how global climate scenarios could affect the probability of approving a deepwater offshore project. The findings show that cumulative oil consumption by 2050 may range from 600 billion to 1 trillion barrels, with marginal supply costs between US$28/bbl and US$44/bbl. The findings indicate that the frontier project lacks economic attractiveness in scenarios limiting the increase in the global surface temperature (GST) below 1.5 °C with no or limited overshoots. However, assuming a smooth price decline trajectory from today to 2050, the project exhibits high profitability and returns across all the scenarios. This suggests that the industry might remain inclined to approve new projects, even amid potential energy transition scenarios, driven by favorable short- and medium-term returns despite long-term uncertainties.