Given the low oil barrel replacement ratio this year, the discovery of 7.7 billion barrels of oil this year is a sign of hope for an oil industry that has been prone to high levels of volatility due to supply constraints and political issues.
"The industry is well on track to repeat the feat achieved in 2018 when around 10 billion BOE (barrel of oil equivalent) of recoverable resources were discovered," says Palzor Shenga, senior analyst of Rystad Energy's upstream team.
The main finds have been offshore of Russia, Guyana and Cyprus, with Russia itself harboring a sheer 1.5 billion BOE of recoverable resources.
Last week, U.S. crude inventories also rose by 3 million barrels, which is part of the longest run of increases since February. The Energy Information Administration is scheduled to release its weekly tally of stockpiles on Thursday.
However, the supply of the commodity still looking bleak as more oil and gas volumes are being consumed than discovered. The replacement rate is still at a 1 is to 6 ratio, standing around 16%, which is the lowest the globe has seen in the past twenty years.
"We estimate the annual number of wells drilled could increase slightly to 25 wells in 2020, as more operators join the Caribbean exploration circuit," says Santosh Kumar, an exploration analyst on the upstream team.
It is therefore not a matter of a depletion of resources, but more so of tapping into unknown sources in new, remote areas. While this does have understandable environmental repercussions, there is a need for oil that is integral to multiple economic, societal and political systems that needs to be fulfilled until we find a viable solution in the domain of renewable energy.
"Explorers have set their sights on establishing a working petroleum system and unlocking the underlying commercial prospectively of the basin. The latest update suggests that the basin could have a potential of around 13 billion BOE," Shenga said.