The Global Oil and Gas Exploration and Development Landscape May Undergo Profound Restructuring

According to industry reports from the International Energy Agency (IEA) and Wood Mackenzie, global upstream oil and gas investment will reach USD 546 billion in 2026, roughly flat with 2025. Nevertheless, notable characteristics emerge: divergent regional investment hotspots, evolving oil-gas mix and shifting investment preferences. The oil and gas industry has officially entered a new development stage featuring "security priority, quality-focused & volume-controlled growth, and diversified layout".

Currently, geopolitical conflicts continue to disrupt the order of international energy corridors. Risks at key shipping chokepoints such as the Strait of Hormuz keep rising. Coupled with diverging monetary policy cycles among major economies and intensified games over energy transition policies, uncertainty across the global oil and gas market has increased markedly. Energy security has become the primary consideration in national energy strategies, profoundly reshaping investment logic and regional deployment for oil and gas exploration and development.

As projected by the IEA and energy consultancy Wood Mackenzie, global upstream oil and gas exploration and development investment will remain at a high level in 2026, and the industry may bid farewell to the phase of extensive scale expansion. Driven by multiple factors including rising expectations for energy transition, elevated geopolitical investment risks and mounting pressure on capital market returns, oil and gas operators have drastically cut long-term high-risk exploration spending. Investment focus keeps shifting toward stabilizing production and boosting efficiency in mature blocks, revitalizing proved reserves, and low-risk offshore oil and gas projects.

North America: Shale Expansion Slows; LNG and Offshore Projects Take Over to Support Production

IEA forecasts that total upstream oil and gas investment in North America will stand at approximately USD 165 billion in 2026, down 5% year-on-year. The United States has long ranked first in global oil and gas output and serves as a benchmark for unconventional oil and gas development. Yet constrained by demands for capital returns, rising costs and tightened environmental regulations, US shale oil and gas investment will exit its rapid expansion cycle in 2026. Capital expenditure will become more rational; enterprises strictly cap new well drilling and focus on lifting per-well output and cutting production costs through technological iteration, with the core task of stabilizing production at existing oilfields.

Meanwhile, the US regards natural gas as a strategic priority. Seizing opportunities brought by the global LNG supply-demand gap, it continues to scale up oil and gas exploration in the Gulf of Mexico and LNG project construction, leveraging well-established infrastructure to further expand its share of global gas supply. Canada builds on high-quality resources and a stable business environment to steadily ramp up oil sands development with growing upstream investment. It further consolidates its position as an Atlantic coast energy export hub and acts as an important supplement for diversified global oil and gas supply.

Middle East: Short-term Investment Pace Slows; Countries Accelerate Long-term Capacity Planning

The Middle East serves as the ballast of global crude oil supply. However, due to geopolitical conflicts, some multinational capitals have postponed frontier block exploration projects in the region, leading to a mild slowdown in near-term investment. Upstream oil and gas investment is expected to reach USD 112 billion in 2026, a 1% year-on-year decline, though it still represents one of the world's largest regional investment volumes.

Major oil producers such as Saudi Arabia and the United Arab Emirates have not cut capacity amid long-term planning. Instead, they keep pushing upgrades and capacity expansion for onshore and offshore oilfields to consolidate conventional oil and gas production capacity. In parallel, Middle Eastern nations are rolling out low-carbon extraction and carbon capture technologies to balance fossil fuel exploitation and green transition, securing near-term supply stability while advancing long-term industrial upgrading.

Russia and Central Asia: Reorienting Market Focus, Continuing to Develop Eastern Siberia and the Arctic

Affected by sanctions and shifting trade patterns, Russia's oil and gas sector has fully adjusted its exploration and development layout. Resources are concentrated on core blocks in Eastern Siberia and Arctic waters, with rising export volumes toward the Asia-Pacific market.

Central Asian and Caspian states including Kazakhstan and Azerbaijan revitalize giant mature oil and gas fields by virtue of their geographic advantages, attracting diversified capital for block exploration and reinforcing their role as Eurasian oil and gas supply hubs. Nevertheless, large-scale frontier exploration projects in the region progress slowly due to financing constraints.

Latin America: Deepwater Exploration Becomes Growth Engine; Brazil Leads Global Offshore Oil & Gas Development

Latin America boasts one of the most active oil and gas exploration markets worldwide. Its upstream investment is projected at USD 77 billion in 2026, up 10% year-on-year. Deepwater exploration stands as the core growth track in the region. Pre-salt oilfields in Brazil's Santos and Campos Basins keep delivering production gains, with continuous breakthroughs in ultra-deepwater exploration technologies attracting sustained investment from leading global oil majors.

Additionally, major oil and gas discoveries have been successively made in offshore basins of Guyana and Suriname, making them hotspots for global oil and gas exploration and development in recent years.

Africa: Frontier Basins See Exploration Boom; Natural Gas Development Accelerates

Africa's upstream oil and gas investment is estimated at USD 41 billion in 2026, representing a 12% year-on-year increase. Sub-Saharan Africa leads the world in upstream investment growth. Exploration in regions such as the Gulf of Guinea in West Africa and offshore East Africa has yielded abundant discoveries. Natural gas projects in Senegal, Mozambique and other countries have entered the development phase gradually, forming a regional LNG industry. Still, weak infrastructure and policy volatility restrict faster regional development. Multinational enterprises adopt a more prudent exploration strategy, prioritizing low-risk blocks with easy access to existing storage and transportation facilities.

Asia-Pacific: Pursuing Energy Self-sufficiency with Coordinated Onshore and Offshore Exploration

The Asia-Pacific region generally relies heavily on imported oil and gas. Driven by energy security demands, countries keep increasing investment in domestic exploration. Upstream investment for the region is forecast at USD 68 billion in 2026. Southeast Asian nations continuously advance offshore natural gas exploration.

China adheres to the strategy of "simultaneous development of onshore and offshore resources, conventional and unconventional reservoirs", boosting exploration and development in onshore basins such as Tarim and Sichuan as well as offshore waters. It conducts research on intelligent exploration and green extraction technologies to steadily raise domestic oil and gas self-sufficiency and reinforce the bottom line of energy security.