Global offshore oil production has reached a record 50 million B/D—nearly half the world’s total output of 102 million B/D in 2025—with volumes projected to climb to 55 million B/D by 2031, according to Rystad Energy CEO Jarand Rystad.
Speaking at the opening of the Offshore Technology Conference (OTC) in Houston, Rystad said the energy consultancy he founded is “quite certain” this growth will take shape thanks to a handful of major developments in Guyana, Brazil, and emerging discoveries in Namibia.
But the outlook was far from unanimous, or patently optimistic.
Even as speakers agreed that the world will need more oil in the years ahead, concerns surfaced over rising project costs and US tariffs that could complicate efforts to bring new barrels to market.
“Maybe now we will see a shift to more conservative [investment] in terms of triggering new projects,” Rystad said. “First and foremost, that will reflect onshore and shale—and to a lesser degree, offshore.”
He emphasized that offshore developers are generally better positioned to endure commodity price swings because the sector inherently takes a longer-term approach. “They’re seeing across the cycle—or through the cycle—to the next cycles,” Rystad said of offshore producers.
Vicki Hollub, CEO of Occidental Petroleum, said the geopolitical challenges facing the industry today “are extreme” and suggested that the US offshore sector in the newly renamed Gulf of America will need to step up its role in the nation’s energy supply as US shale output plateaus in the coming years.
“I believe that there’s no better place to come up with more recoveries and more development than in the Gulf of America,” she said. “That’s why this conference is so critically important. In 5 to 10 years, the Gulf has to get stronger and better and deliver more for the United States because you have to offset the declines that we’re going to see in the shale.”
Magda Chambriard, appointed president of Petrobras last year, spoke on the same panel where she echoed the need for a long-term view. She stressed that offshore projects typically take 7 years from discovery to first production—making cost discipline and pricing stability critical to investment decisions.
She went on to say that the impact of recent price declines—from almost $90/bbl for Brent crude around this time a year ago to around $65/bbl last month—are already being felt in Brazil.
“This is a real issue and we have to challenge our suppliers to help us, support us by providing simple and inexpensive projects,” said Chambriard.
The national oil company leader also noted that Brazil’s offshore recovery rates still hover around 18% and argued that new technologies will be essential to boosting recovery from both mature and frontier basins. “Technology helps us not only to scout and face new frontiers, but also to increase production in mature basins,” she said.
Industry leaders on the panel also expressed growing concern over recent tariff measures and the absence of a consistent federal offshore leasing schedule.
Erik Milito, president of the National Ocean Industries Association (NOIA), said the US Gulf is currently producing about 1.8 million B/D and could grow to 2.4 million B/D with the right policy support.
He described new legislation being drafted in Washington, DC, that would require two offshore lease sales per year over the next 15 years as a “positive step away from the lack of lease sales we've had over the past few years, which has led us to a position where we haven't had the ability to do the exploration.”
“We need a consistent, predictable leasing schedule,” Milito added, noting that lapses in federal leasing have disrupted long-term planning and investment.
He also warned that recently announced US tariffs could increase offshore project costs by more than 17%, citing recent analysis from Rystad Energy. “That is incredible and that is not sustainable,” he said.
Because the US offshore sector accounts for only a small share of global supply, Milito said it’s unlikely that specialized equipment manufacturers will be able or willing to meet the new trade conditions. “There’s not an incentive for these manufacturing bases to come to the US,” he said. “The global market is working fairly well providing oil country tubular goods and those types of things.”
Despite the headwinds discussed throughout the panel, Hollub closed on an optimistic note. She pointed to estimates that the US still holds 1.5 trillion bbl of oil underground and said the country remains well-positioned to lead the global energy market—so long as it continues investing in technology.
“There are a lot of countries that have more oil resources than we have, yet we’re the largest producer in the world,” she said, crediting innovation as the key driver. “Innovation has always happened here.”
