IF one were to believe the petroleum prophets of doom, the world should have run dry of oil somewhere between bell-bottoms and the Bee Gees.
In 1939, the US Department of the Interior declared that oil was limited, which was about as revelatory as saying the sun eventually sets. President Jimmy Carter warned in 1977: ‘The oil and natural gas we rely on for 75 percent of our energy are running out. We can use up all proven reserves of oil in the whole world by the end of the next decade.’
Yet here we are in 2025: oil still flows, and prices hover around US$80 per barrel-hardly the death rattle of a vanishing commodity.
The International Energy Agency, however, offers less comfort. To keep production steady through 2050, the world must spend around US$540 billion every year. Decline rates in existing fields are steepening, particularly as dependence on US shale grows. Shale wells gush quickly but fade fast. As Fatih Birol, the IEA’s executive director, put it: the industry has to ‘run much faster just to stand still.’
The IEA reported that global upstream oil and gas investment reached US$528 billion in 2023, up from US$474 billion the year before. But half that increase vanished into cost inflation, not new supply. More revealing still: less than half of industry cash flow is plowed back into drilling. The rest is lavished on dividends, buybacks, or debt reduction. Apparently, buybacks are sexier than barrels.
This is why cheap oil never lasts. When prices dip, producers shelve projects and idle rigs. Supply contracts, and the inevitable rebound follows. Traders have long joked that the only cure for low oil prices is low oil prices. It is one of the few clichés that happens to be true.
The IEA’s latest analysis puts hard numbers to this cycle and underscores the danger. Without steady investment, global supply would shrink by over 5 million barrels per day every year-the equivalent of Brazil and Norway combined. Declines are now about 40 percent faster than in 2010. Unless demand shifts away from fossil fuels, companies will have to develop reserves that are not even discovered yet. Some analysts already warn that by next year, non-Opec growth will flatten for more than a year. In short, coasting is not an option.
Oil’s capital intensity has always been both curse and strength. For decades, the industry thrived on heavy upfront spending, a commitment most other sectors could not match. But today the tables have turned. Tech giants are now more capex-hungry than oil drillers, leaving the question: in a world drowning in investment needs, who will provide half a trillion dollars annually for oil-especially if a recession tightens global credit?
Nowhere is this uncertainty more consequential than in the Philippines, a nation that produces barely 1 percent of the oil it consumes yet relies on petroleum for nearly 50 percent of its energy. Over 90 percent of crude and refined products come from abroad, while transportation alone burns nearly half of all petroleum. Gasoline and diesel imports account for the overwhelming majority of consumption. When crude spiked past US$120 in 2022, pump prices blasted beyond P70 per liter, straining household budgets and stoking inflation. Renewables are expanding, and the Philippine Energy Plan envisions 35 percent clean power by 2030. But even that blueprint admits oil will dominate transport for years to come. Solar panels will not fly airplanes or fuel inter-island ferries.
The irony is unmistakable. Western institutions keep seeking oil’s epitaph, even as they concede demand has not peaked. Clean energy spending is surging, but oil’s near-term role is entrenched – especially where infrastructure, affordability, and energy density still tilt toward hydrocarbons. For the Philippines, this reality collides with financial and geopolitical forces far beyond its control. The less global producers invest, the more Filipino consumers are left exposed to the next round of price shocks.
What lies ahead is not an oil apocalypse, but a long and uneven path where geology, capital flows, and political will collide. If investment keeps pace, prices may stabilize, and obituary writers will once again look premature. If underinvestment continues, the next shortage will not whisper. It will roar.
The real weakness of the ‘end of oil’ narrative is not its optimism but its complacency. Oil is not ending because the planet is dry. It may end because the money stops flowing. For the Philippines, failing to see that distinction could be the costliest mistake of all.