ExxonMobil Boasted Oil Price Rise... Internally Predicts "Price Drops $10 per Barrel"

ExxonMobil Lowers Oil Price Forecast by 11-17%
Financial Burden Increases if Oil Price Recovery Slows... Investor Concerns Rise

[Asia Economy Reporter Naju-seok] It has been revealed that global oil company ExxonMobil has internally downgraded its long-term oil price outlook. This internal forecast contrasts with the external outlook that oil prices will rise in the near future. There are also concerns that if ExxonMobil's worries materialize, its financial structure could deteriorate.

Darren Woods, CEO of ExxonMobil
[Photo by Reuters]

On the 25th (local time), The Wall Street Journal (WSJ) reported that ExxonMobil has lowered its oil price forecast for the next seven years by about 11-17% compared to previous projections. WSJ cited an internal ExxonMobil report for this information. The company views factors such as COVID-19, the growth of the renewable energy industry, and the introduction of electric vehicles as negative influences on the oil industry.

Last year, ExxonMobil expected that oil would trade at an average of $62 per barrel over the next five years and rise to $72 per barrel in 2026 and 2027. However, this year's forecast anticipates oil prices of $50-$55 per barrel over the next five years, with $60 per barrel expected in 2026 and 2027.

Investors have requested oil price forecasts for future investment plans and asset value analysis, but unlike other oil companies, ExxonMobil has not disclosed long-term oil price forecasts until now. The oil price outlook reported by WSJ this time was also prepared internally for financial purposes, not for public disclosure.

Although ExxonMobil has not revealed its oil price forecasts, it has made optimistic statements about the long-term outlook. The company believed that oil prices would enter a recovery phase once COVID-19 subsides. For example, as recently as October, ExxonMobil disclosed to investors the reduction in investments by oil companies during the COVID-19 pandemic and the possibility of supply shortages in the coming years. Darren Woods, ExxonMobil's CEO, described industry concerns as temporary and predicted that oil demand would increase in the near future.

[Image source=Reuters Yonhap News]

ExxonMobil has also maintained this stance regarding investments. While the timing of investment plans may be delayed, the company stated it intends to proceed with the planned investments.

Concerns about the future financial environment have grown as ExxonMobil has lowered its oil price outlook contrary to its previous statements. An analyst from RBC Capital Markets said, "ExxonMobil's breakeven point is relatively high within the industry," adding, "Given current spending levels, oil and natural gas production will need to be reduced."

Earlier, CEO Woods stated, "Even if oil prices remain at $50 per barrel, ExxonMobil's debt level is manageable." However, he added, "If unprecedented conditions persist for more than five years, plans may change."

This content was produced with the assistance of AI translation services.