How to prevent a serious shortage of oil supply? Moody's: Exploration companies have at least that amount of drilling budget

According to Moody's Investor Services, the three major international credit ratings, upstream annual investment plunged about 30 percent in 2020 and has only recovered
slightly since then.
Oil exploration companies need to raise their drilling budgets by 54 percent to more than $500 billion to prevent severe supply shortages
in the coming years.

Crude oil and gas drillers have suffered from an unprecedented plunge in demand and prices last year, but have not expanded their search for undeveloped fields, as the industry usually does, in response to the recent market rally
.

In a report last week, Moody's said that while international crude oil and U.
S.
natural gas are up 50 percent and 120 percent, respectively, this year, global drilling spending is expected to grow by only 8 percent
.

Moody's analyst Sajjad Alam wrote in the report that the number is too small to replace the oil that these companies will extract from the ground in 2022, laying the groundwork
for a more tight supply scenario.
Any such austerity will be on top of the current crises that plague Asian and European economies, where prices break records almost every day as winter approaches, and they are busy supporting fuel reserves
.
The sector will need to significantly increase spending, especially if oil and gas demand continues to climb through 2025, surpassing pre-pandemic levels
.

Citing estimates from the International Energy Agency, Moody's said oil and gas companies are expected to spend $352 billion
on drilling and related activities this year.
If they raise it to the recommended $542 billion, it would be the highest in the
world since 2015.

On Monday (October 11), U.
S.
crude oil prices continued to soar, once again hitting a new high in nearly seven years, and cloth oil hit a new three-year high
.
How long can the oil get hot? Industry insiders believe that there is more demand for oil heating in winter, the oil market increases production as originally planned, coupled with the European and American energy crisis, resulting in a strong expectation of oil prices in October, but the overall bullish oil prices in the fourth quarter should be noted
.