Last year, upstream oil investment was projected to have declined 2.5% Y/Y to $420 billion after low oil prices put pressure on producers and slowed expansion plans. Companies across the industry continued to prioritize profitability, free cash flow, and debt reduction over aggressive production growth, a trend reinforced by macro uncertainty. The decline was also driven by reduced spending by U.S. independent light tight oil and shale producers, even as national oil companies (NOCs) in the Middle East increased their investment, and spending on conventional projects generally proved more resilient.
And now energy experts at Wood Mackenzie are predicting that these trends will continue in the current year. According to the analysts, global upstream operators will cut investment for a second consecutive year in 2026, with capital expenditure expected to fall by at least 2-3% year-on-year, and more than 5% compared to 2024 levels, as the industry navigates sub-$60/bbl oil prices while maintaining focus on long-term resilience. Reductions in North America and Europe will offset increases in Africa, Latin America, and the Middle East.
Despite these pressures, non-OPEC liquids and global gas supply are projected to grow around 1.5% each. Brazil, Guyana, and Argentina are set to be major drivers of non-OPEC oil supply growth in 2026, accounting for half of the expected 0.8 million barrels per day (b/d) increase in 2026 the U.S. Energy Information Administration has predicted. According to the energy watchdog, Brazil's growth will mainly be driven by new offshore pre-salt projects coming online, including the start-up of Equinor’s (NYSE:EQNR) Bacalhau field in October as well as the start-up of two additional FPSOs by Petrobras in December. EIA has projected a 0.2 mb/d increase in production by Brazil in 2026 to 4.0 mb/d.
In Guyana, rapid development of the Stabroek Block by Exxon Mobil (NYSE:XOM) and its partners is pushing production to new highs, with potential for over 1 million barrels per day (bpd) as new FPSOs (Yellowtail, Uaru, Whiptail) come online. Exxon’s Yellowtail project has already attained full production capacity, pushing Guyana’s production to more than 900,000 b/d. Guyana is increasingly exporting crude to Asian markets.
Meanwhile, the start-up of the Uaru project in 2026 will add another 250,000 b/d of supply, helping push Guyana’s crude oil production past 1.0 million b/d by 2027.
EIA has also forecast significant production growth by Argentina in 2026, mainly driven by its massive Vaca Muerta shale reserves. Argentina’s oil production is expected to average 810,000 b/d in 2026, up from 740,000 b/d in 2025 and 670,000 b/d in 2024.
Previously, Rystad predicted that oil from offshore Brazil, Guyana, Suriname, and Argentina’s Vaca Muerta shale play will be key sources of cost-competitive non-OPEC oil supply through 2030. Rystad predicted that global liquids demand will peak in the 2030s at around 107 million barrels per day (bpd), maintain a plateau above 100 million bpd through the 2040s before declining to around 75 million bpd by 2050. According to the Norwegian energy consultancy, non-OPEC+ supply will be key to balancing the global market, with cheap oil from South America helping to offset slower U.S. shale growth. Non-OPEC+ producers are expected to account for around 5.9 million bpd, or nearly 60%, of new conventional oil currently under development through 2030 (total new capacity). South America will be the main source of this supply growth at 560,000 bpd of crude and condensate, with North America supplying ~480,000 bpd.
The EIA has forecast U.S. oil production will decline slightly in 2026 after years of growth, with output projected to average around 13.5 million barrels per day (bpd), a decrease of about 100,000 bpd from 2025 levels, as gains in the Permian Basin, Alaska, and the Gulf of Mexico are offset by declines in other regions. This shift signals a plateau in output, with falling oil prices and a global oversupply influencing the market.
Meanwhile, Wood Mackenzie has predicted that global gas spending will increase by 7% in 2026, even as total oil investment is expected to fall. This growth is tied to the commissioning of new LNG projects, primarily in the United States, Canada, and Qatar, which are expected to boost supply and demand. Overall, the general consensus among analysts like Wood Mackenzie and Fitch Ratings is that global oil and gas companies will maintain capital discipline and potentially scale back overall spending in 2026 due to oil price volatility and oversupply concerns. Total upstream spending from the seven major oil companies is expected to be relatively flat compared to prior years.
By Alex Kimani for Oilprice.com
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