The most common assumption I read currently in oil analysis is the view that production growth absolutely must come from somewhere soon, to serve demand growth that's coming next year. This assumption is often paired with the view that western oil producers are making.... 1/
...a kind of policy mistake in their cautious reluctance to return to growth-oriented drilling. I'm on the other side of both assumptions. Indeed, I think western oil companies see--and have seen for some time--a very serious risk that total global oil demand.... 2/
...will not grow much or at all, in the years ahead. Why the divergence? Why do politically minded people and oil and gas fund managers have such a different view than oil companies themselves? I could speculate. But suffice to say, the no-growth risk has been mounting... 3/
...for years. It began with a big pivot from BP, two+ years ago, when they realized that hardly any growth existed in global oil after 2025. IEA has declared global road fuel has peaked. And as we know, global sales of ICE vehicles peaked 4 years ago. But aside.... 4/
...from these rather top level macro thematics, here is a more real-time, empirical framing that may help to understand what comes next in global oil demand: OECD vs Non-OECD growth. In this week's newsletter, I explained that for many years now, global oil demand growth....5/
...has relied on two enduring factors: 1. That Non-OECD demand grows nicely, and 2. that OECD demand, which peaked 15 years ago, remains steady. That worked for a while. Now it does not appear it's going to work as well. 6/
The wrinkle showing up now is that OECD demand appears on course to either fall, or not recover as much. That makes sense for a whole host of reasons. If this plays out as agencies such as EIA and IEA expect, and if the current weakness continues, then total global oil... 7/
...demand suddenly becomes more acutely dependent on the following hope: that Non-OECD demand growth outruns declines in OECD demand. Perhaps that happens. Perhaps it happens for brief periods of time. But we should at least understand the import this places on the marginal... 8/
...barrel, and those responsible for producing it. How eager would you be to *really go for it* and produce all out, given these conditions? We have to at least consider that western oil companies are not making a mistake. /fin 
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