The Energy Supercycle Could Last Into the 2030s | Josef Schachter

Josef Schachter · Schachter Energy Research Services Inc.

Pipeline delays and cost overruns lengthen the energy cycle; TMX went over budget and late.

Infrastructure projects take longer than they used to. He cites the TMX pipeline and Coastal GasLink as examples that ran well over budget and past schedule. Environmental rules, First Nations consultation and government regulation add delay, so new supply comes on stream slowly and the cycle lasts longer.

“simply because the infrastructure issues have shown us that they take longer to do. And in Canada, for example, TMX pipeline, way over budget and way longer than expected.”at 4:23

Josef Schachter · Schachter Energy Research Services Inc.

His research models use $80 WTI for 2026 and $90 WTI for 2027.

His research team uses $80 WTI for 2026 and $90 for 2027 as planning assumptions for all covered companies. He says the 2026 figure could rise to $84-85 based on early Q3 2026 results from reporters. He also sees a trading range where prices could dip into the $80s.

“But we're using in our forecast for all of our companies $80 WTI for 2026.”at 5:07

Josef Schachter · Schachter Energy Research Services Inc.

North American energy supply should earn a premium valuation over global peers.

Supply security makes North American production worth more, so North American producers should trade at a premium to global peers. US and Canadian companies have large reserve life indices (PDP and 1P proven). Foreign companies sold their North American assets and will return later because the reserves are good and transport to Europe and Asia is cheaper than from the Middle East.

“supply is going to be a premium which means our stock should trade at a premium to the stocks around the world.”at 6:06

Josef Schachter · Schachter Energy Research Services Inc.

Many energy producers trade at 2-4x cash flow, well below their PDP reserve life value.

He screens for producers trading at low cash-flow multiples relative to PDP reserve life, the value of proved developed producing reserves with no further spending. Examples include companies at 2.7x cash flow with 7.2 years PDP and others at 3.2-3.7x cash flow. Producers trade at 2-3x depressed cash flow at cycle bottoms and at 8-10x peak cash flow at tops. Current multiples are below the PDP-implied value, so he sees bargains.

“I've got companies trading at 2.7 times cash flow with seven point two years PDP.”at 10:04

Josef Schachter · Schachter Energy Research Services Inc.

Canadian oil output could grow by 1-2M barrels a day over the next decade.

Canada produces about 6.1M bpd, up from 2-3M bpd decades ago, and could add 1-2M bpd in the decade ahead. Canada now ships 3.5-4M bpd to the US, and he expects to lose 1-2M bpd of that market over the decade without new pipelines to move heavy oil to the West Coast. An Alberta-to-Ontario pipeline would also let Ontario replace Saudi imports.

“we're talking about growing by a million or 2,000,000 barrels in the decade ahead.”at 14:46

Josef Schachter · Schachter Energy Research Services Inc.

WTI oil could exceed $150 before the end of the decade, above the 2008 peak near $147.

He expects oil to climb past the 2008 high (about $147) before 2030. The analogy is 2000-2008, when Chinese import demand plus restricted supply took WTI from $10 to $147. Structural underinvestment, rising emerging-market demand and large capital needs for new supply support the view. Corrections along the way are expected: oil could fall toward $70 if the Middle East war ends and OPEC opens up, but refilling depleted SPRs and rebuilding destroyed Gulf infrastructure should limit the downside. Current WTI is about $102-103.

“I think before the end of this decade, we're gonna be over the 150, the 147, you know, that we saw in 2008.”at 18:03

Josef Schachter · Schachter Energy Research Services Inc.

Global oil demand grows about 1.2M bpd a year outside shocks, with emerging markets driving it.

He expects OECD demand to fall 2-3 million barrels a day by 2035 but non-OECD and emerging-market demand to rise by more than 10 million. Emerging-market growth comes from building copper plants, critical-mineral facilities, housing and cars. He says the 20-year average growth outside COVID, war and recession is about 1.2M bpd, and could be 1.3-1.5M bpd now. Demand will rise in fits and starts, and high prices are not expected to destroy demand because supply takes years to add.

“What we're looking for is OECD to drop by a two or 3,000,000 barrels between now and 2035, but we expect more than 10,000,000 barrels of demand growth from the non OECD”at 19:20

Josef Schachter · Schachter Energy Research Services Inc.

Diesel export controls would also cut jet fuel and gasoline output from refiners.

Refiners produce diesel, jet fuel and gasoline together from the same barrels. If diesel cannot be sold abroad, refiners have no reason to make more of it or the other products, so an export ban would reduce overall fuel supply and push prices higher. He sees such controls as self-defeating.

“put an export on diesel, as the refiners produce diesel, jet fuel, gasoline, and you can't sell the diesel, that means you're not gonna produce more jet fuel”at 22:12

Josef Schachter · Schachter Energy Research Services Inc.

OPEC still matters: Saudi Arabia and Iraq are the swing producers with the most upside.

He says OPEC+ still matters because global demand rising from about 105M to 115M barrels a day by the 2030s cannot be met by non-OPEC supply alone. Gains from the US, Brazil, Guyana, Canada, Norway, the UK North Sea and possibly Namibia are offset by declines elsewhere. He expects Saudi Arabia (now about 8M bpd, previously about 10M) and Iraq to have the most room to grow. Russia could return to 12-13M bpd if sanctions and fighting end. He doubts OPEC's money goes into its own industry because of wars and graft.

“Saudi Arabia was 10 at the high, now it's eight, could they be 12 or 13? So the swing producer with the most upside in terms of production is going to be the OPEC countries with Saudi Arabia, Iraq, maybe again,”at 32:24

Josef Schachter · Schachter Energy Research Services Inc.

Venezuela could reach 3-3.5M bpd, but damaged facilities need major repairs first.

Venezuela produces about 1.3M bpd, and the US is its main customer. Chevron stayed through the difficult years. Reaching 3-3.5M bpd is possible, but the first 500,000 barrels a day are hard because facilities have been neglected and environmental damage in the Orinoco Basin needs cleanup. Pipelines are rusted or leaking and must be repaired, and local communities need to see economic benefits. The Gulf Coast is a much closer and cheaper market than the Middle East.

“They've got to do a lot of cleanup. They've got to put in pipelines, they've to repair old pipelines that are rusted and with holes in them.”at 34:10

Josef Schachter · Schachter Energy Research Services Inc.

Emerging-market oil demand growth could reach 1.3 to 1.5 (million barrels a day) and keep oil tight.

Schachter argues that emerging economies will need new oil and rising oil consumption, and puts the resulting demand growth figure at 1.3 or 1.5. He frames this as a structural source of demand that supports his bullish energy-supercycle view. The unit is not stated in this excerpt and the surrounding OPEC comparison is cut off, so the figure is a rough, partly unsupported estimate.

“all these emerging countries are going to be the ones needing the new oil and the new consumption of oil, that number could be 1.3 or 1.5.”at 36:10

Josef Schachter · Schachter Energy Research Services Inc.

Natural gas producers look cheap versus oil producers and could see big cash-flow gains.

Natural gas stocks trade cheaper than oil stocks because gas prices have lagged. He says longer-term NYMEX at $5-6 and AECO at $3-4 would significantly change natural gas company cash flows. Many producers hold both oil and gas. Gas in the Montney and Duvernay is associated with oil, and it needs pipelines to reach market because it cannot be flared.

“Right now natural gas stocks are cheaper than oily stocks simply because the commodity hasn't done what we wanted it to do.”at 16:35

Josef Schachter · Schachter Energy Research Services Inc.

Canadian LNG exports could reach 6-7 Bcf/d by the early 2030s, from LNG Canada's 2 Bcf/d start.

LNG Canada on the West Coast is a 2 Bcf/d project now under construction. He says that with government and First Nations approval, Canada could reach 6-7 Bcf/d by the early 2030s, up from almost nothing two years earlier. Gas pipelines such as Coastal GasLink can be expanded with compression to support additional LNG volumes.

“And we're talking about with approval from government and First Nations on side, that by the early 2030s, we could have six or seven BCF up from nothing two years ago.”at 17:15

Josef Schachter · Schachter Energy Research Services Inc.

Data center buildouts are slowing because of power, water, access and input constraints.

He says data center construction is slowing because power supply is tight, water is limited, and site access and materials are constrained. These bottlenecks are part of why he expects the energy cycle to last longer. Data centers need large amounts of copper and reliable electricity, and both are in short supply.

“right now we're seeing data centers slowing down because number one, the power is an issue, water is an issue, access is an issue, and the inputs to it are an issue.”at 20:43

Josef Schachter · Schachter Energy Research Services Inc.

Data center developers underestimated community opposition over power rates, water and taxes.

He says data center projects face backlash when power rates rise or water becomes scarce for residents. Developers promise jobs and investment but often pay no property tax for about twenty years, so local schools receive no funds. He calls this hubris: the companies assumed communities would welcome them without doing the groundwork.

“the industry didn't do their homework. They just thought, oh, if we come in here with a 100 jobs and spend a billion dollars, they're gonna love us.”at 30:04

Josef Schachter · Schachter Energy Research Services Inc.

The commodity and energy cycle that began in 2020 will last into the 2030s.

He frames the current cycle as structural, following the pattern of earlier cycles: underinvestment, then demand growth, then a supply shock. He cites the 1974-81 cycle, the 1999-2008 China-driven boom and the post-COVID trading period. He argues this cycle lasts longer because new mines and oil supply need heavy capital and take years to build. Mining projects in Africa and Asia face royalty, community and infrastructure requirements, and pipeline projects run over budget and behind schedule.

“I think this cycle started in 2020 after COVID, and I think it's gonna last into the twenty thirties.”at 3:38

Josef Schachter · Schachter Energy Research Services Inc.

War damage to Gulf energy infrastructure must be rebuilt, supporting prices after the war.

He says the war has destroyed pipelines, refineries, airports and chemical plants in the Middle East. All of it must be rebuilt after the war, and refilling strategic reserves adds more demand. These needs mean prices stay supported even if the conflict ends, and he sees a return to $70 oil as possible but limited by this rebuilding.

“And now we've destroyed a lot of infrastructure in The Middle East. We've destroyed pipelines and refineries and airports and all of those things, chemical plants. All of that's going to need to be rebuilt when the war is over.”at 4:36

Josef Schachter · Schachter Energy Research Services Inc.

Producers are using cash flow to pay down debt and buy back stock rather than grow.

Producers are using higher cash flow to pay down debt, buy back stock through normal course issuer bids, and pay dividends and special dividends. He expects growth spending to rise later in the cycle, but companies will not issue equity until their stock reaches about 7x cash flow, because they consider their shares too cheap. Cheap shares limit how much capital flows into new supply.

“Companies are focused on one, paying down debt. Two, normal course issuer bids, so buy back stock, shrink the capitalization.”at 5:36

Josef Schachter · Schachter Energy Research Services Inc.

Shortages of critical minerals are a core driver of the energy and commodity cycle.

He argues the cycle's driver is raw materials. Critical minerals are needed for the energy transition, defense and medical industries, and most supply must come from Africa, South America and parts of Asia. Mines in these places require royalties, returns for owners, education and infrastructure. He also flags possible US-China export controls as China and the US disagree over mineral exports. At his conference, lithium, graphite, graphene, helium and uranium companies drew full rooms.

“we need critical minerals, we need copper, we need aluminum, we need nickel, we need more oil.”at 13:02

Josef Schachter · Schachter Energy Research Services Inc.

Copper is in short supply, and data centers need a lot of it.

He links copper demand to data centers, which need large amounts of it, and to power and construction needs that are already short. He says there is a copper shortage, and the buildout of copper plants and critical-mineral facilities in difficult terrain adds to demand. He sees this as part of the longer, capital-intensive cycle.

“Then of course, you know, for data centers, need a lot of copper. Well, there's a shortage of copper.”at 13:17

Josef Schachter · Schachter Energy Research Services Inc.

Schachter owns uranium stocks and sees Canada's uranium as among the richest.

Though his firm focuses on oil and gas, he owns uranium and critical-mineral stocks. He says Canada has some of the richest uranium in the world and names Cameco and NexGen in Saskatchewan. Uranium interest was strong at his conference, reflecting the broader shortage of base and critical minerals that will be needed.

“but it doesn't mean I don't own uranium stocks and I don't own critical mineral stocks”at 13:46