Oil prices boost corporate growth into 2027

Wood Mackenzie expects major oil and gas companies to regain their financial strength by 2027, supported by rising oil prices and improved budgets. Most companies are heading toward reducing their debt by less than 20% and increasing investments by around 5%. However, global oil production is expected to decline by 31% between 2030 and 2040, highlighting the need for mergers and acquisitions to compensate for the natural decline of existing fields and to develop new resources. Currently, liquidity is mainly focused on reinvestment, with operational cash flows projected to exceed 2025 levels by 14%. If Brent prices rise to $90 per barrel, cash flows could increase by an additional $104 billion, but both scenarios expose companies to market volatility risks. Overall, the forecasts point to a significant shift in oil companies' strategies to prepare for future production declines and to increase collaboration and mergers in the coming years.

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