The global upstream oil and gas sector could generate a cash windfall of US$495 billion in 2026 if Brent crude prices average US$90 per barrel, according to Wood Mackenzie’s mid-year outlook published on July 28.
The research firm said the projected cash flow would be more than double the amount companies expected at the start of the year, when planning assumptions were based on Brent averaging about US$60 per barrel.
“The oil and gas industry came into 2026 bracing for a difficult year. What it got was a price surge, an unplanned cash windfall, and a set of strategic pressures that, if anything, have grown more urgent,” the report stated.
Wood Mackenzie’s analysis covers 49 of the largest international oil companies (IOCs) and national oil companies (NOCs) through its Lens Upstream platform and Corporate Strategy and Analytics Service. The companies are expected to account for US$272 billion of the projected windfall, equal to about 70% of their combined 2026 investment.
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Despite stronger-than-expected oil prices, Wood Mackenzie said companies have maintained capital discipline, with investment budgets largely unchanged and limited increases in shareholder returns.
“What is perhaps most telling about the corporate response to the turbulent macro forces impacting the oil and gas sector is just how little changed,” said Tom Ellacott, Senior Vice President, Corporate Research at Wood Mackenzie.
Ellacott explained that “most players have adopted a wait-and-see approach to the market turmoil, preferring to accumulate cash on the balance sheet rather than return it to shareholders or increase investment. Capital discipline has proved more durable than either the bears or bulls expected.”
Wood Mackenzie’s outlook also pointed to a long-term production challenge facing the sector. The research body estimates 155 companies could experience an average production decline of 30% between 2030 and 2040, representing a loss of 32 million barrels of oil equivalent per day outside Middle Eastern national oil companies.
More than 70 companies are expected to face production declines of 50% or more during the same period.
“High prices ease the financial pressure. They do not solve the next-decade production challenge. The second half of 2026 will show whether the strategic response catches up with the financial firepower,” Ellacott explained.
