Supportive federal policies, growing LNG exports, and the energy transition will set the stage for strategic decisions across the U.S. oil and gas sector trends in 2025. Here are some trends that Jeff Robertson, Managing Director at Water Tower Research, identifies as key forces shaping the oil and gas landscape next year. (1) Pro-Growth U.S. Policies Aim to Support Supply Expansion: The incoming administration plans to ease regulations, expand access to federal leases, and streamline permits for wells, pipelines, and LNG exports. Production expansion will depend on commodity prices and costs. (2.) Natural Gas Optimism Grows Amid Oil Market Caution: OPEC+ production cuts and muted demand forecasts keep oil prices subdued, while natural gas prices are projected to rise to $2.90/MMBtu, supported by growing LNG exports. (3.) M&A Activity Shifts to Portfolio Optimization: After $250 billion in M&A deals since 2023, companies are now focused on divesting non-core assets and improving capital returns. (4.) Capital Discipline Prioritizes Shareholder Returns: With free cash flow expected to exceed $100 billion in 2025, operators remain committed to dividends and buybacks, prioritizing shareholder value. (5.) Traditional Energy Advances Decarbonization Projects: Tax incentives are driving investments in carbon capture, methane reduction, and renewable energy, with EPA permits and state policies shaping project approvals.
Related: O&G Outlook for 2025