Shell CEO Wael Sawan told a WSJ conference that oil prices will rise over the longer term, citing 5-7% annual production declines. The supply squeeze thesis supports integrated energy stocks like Chevron and Exxon.
Shell CEO Wael Sawan told a Wall Street Journal conference that oil prices will rise over the longer term, even after the Middle East conflict fades. The reason is structural: oil and gas production from existing fields is declining at 5% to 7% per year, Shell estimates, while global demand stays stable or grows.
The International Energy Agency said oil and natural gas together met 32% of global energy demand in 2025. Both fuels saw demand growth that year, even as renewables expanded. With depleting resources and no replacement yet scaling fast enough to cover the gap, the supply-demand math pushes prices higher, Sawan argued.
Integrated energy companies such as Shell, Chevron and ExxonMobil stand to benefit. These firms span production, transport and refining, so higher crude prices lift revenue across the chain. Chevron yields 3.7% and has raised its dividend for 38 straight years. Shell yields 3.6% and restored its payout after cutting it in 2020. Exxon yields 2.6% with 43 years of annual increases. TotalEnergies, another integrated peer, yields roughly 5% and maintained its dividend through the energy transition.
Sawan's warning is not a short-term call. It rests on the assumption that global economic growth keeps energy demand elevated. A recession that cuts consumption would weaken the case. Faster clean-energy adoption could also cap oil's long-term upside. Shell is betting that will not happen quickly enough.
AlphaScala's proprietary model rates Shell at 55/100 (Mixed) and Chevron at 55/100 (Moderate), both in the Energy sector.
The next scheduled catalyst is the OPEC+ meeting later this month. Any production increase from the group would test the supply narrative. Shell's own capital spending plans, due with its next earnings report, will show whether management is putting money behind the price forecast.
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