The narrative of the oil market will soon be flipped on its head, according to Occidental CEO Vicki Hollub. Oversupply will soon ease and the market will be undersupplies, sending prices upward. Oil could be in a new “supercycle,” Goldman Sachs analysts said recently. The oil market is about to do a 180, according to Occidental Petroleum’s CEO, Vicki Hollub.

The chief executive of the energy giant beloved by Warren Buffett pointed to the oversupply in the oil market as the main factor keeping a lid on prices. Global oil demand growth is expected to ease in 2024, according to the International Energy Agency. Meanwhile, the world’s oil supply is expected to rise to a record 103.5 million barrels a day this year.

That kind of supply-demand mismatch has helped push prices lower in recent months, but the dynamic is about to be flipped on its head, Hollub warned, with undersupply set to be the dominant theme over the coming years.

Though crude demand has eased in the short term, energy markets are slammed with long-term supply issues, Hollub said, given that producers haven’t been able to replace the oil they’re currently producing. She estimated that over the past 10 years, the world has replaced less than half of the oil that was produced.

“All the big fields have been found. So, if you take the 20 largest fields in the world, 97% of the volume from those was discovered before 2000. So we’re in a situation now where in a couple years’ time, we’re going to be very short on supply, so the situation is going to flip,” Hollub warned.

Other oil market forecasters have warned of a similar outcome, where the undersupply of crude puts upwards pressure on oil prices. Chronic underinvestment in the industry also means oil and other commodities are in a “supercycle,” which could push crude as high as $100 a barrel, Goldman Sachs previously estimated.

OPEC+ has been trying to boost prices via supply cuts, and recently, Saudi Arabia’s energy minister brushed off falling oil prices as a “ploy” driven by market speculators, who are merely pretending demand is weaker than supply.

The oil cartel has slashed its output repeatedly to get control of global crude prices, and has vowed to slash its production by 2.2 million barrels a day this quarter. Top members have said those cuts could be extended deeper into the year.

“What OPEC has tried to do is balance the markets,” Hollub said. “They try to balance the markets in the near terms so we don’t have all this volatility.”

But the effects of OPEC cuts have been muted so far. That’s partly due to booming production elsewhere, particularly in the US, which churned out a record volume of oil in 2023, with new records also being eyed for 2024 and 2025, the Energy Information Agency estimated.