The global upstream oil and gas sector is poised for a year of mixed messages in 2025, according to a recent report by Wood Mackenzie.

Despite improving sentiment, the industry faces high geopolitical tensions and concerns over supply and demand.

The report, titled Global Upstream: 5 things to look for in 2025, highlights five key themes that will shape the upstream landscape:

Efficiency takes centre stage

Operators are expected to intensify their focus on efficiency, leveraging artificial intelligence and sophisticated tools to optimise costs, production, and revenues.

Fraser McKay, head of upstream analysis at WoodMac, notes that global tariff risks and softer prices are driving this trend.

Resource capture resurgence

Increasing confidence in a higher-for-longer demand outlook is prompting upstream companies to reassess their portfolio longevity. Robert Clarke, VP of upstream research, predicts a resurgence in conventional exploration and increased activity, albeit with capital discipline.

Strategic M&A activity

While merger and acquisition activity is expected to continue, it may not reach the $130 billion annual average of the past decade. US Independents are likely to expand beyond the Permian, while majors aim to bolster post-2030 cash flow.

The Americas liquids growth diversifies

Despite concerns about oil demand and potential oversupply, the Americas are projected to deliver robust growth of approximately one million barrels per day in 2025. Notably, growth is expected to diversify beyond the Permian basin, with Latin America and the Gulf of Mexico showing significant potential.

Potential new wave of LNG projects

While 2025 is expected to be a quiet year for LNG final investment decisions due to service sector constraints and rising costs, projects may still progress. McKay suggests that US tariffs could potentially impact China’s LNG imports, while Asian LNG buyers might acquire US Lower 48 upstream gas positions.

As the upstream sector navigates these trends, companies will need to balance efficiency, resource capture, and strategic growth to thrive in the evolving energy landscape of 2025.