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Middle East oil shock could lift 2026 upstream free cash flow to $495B
Wood Mackenzie links the upgrade to crude averaging $90 per barrel and says the sector’s extra cash is expected to concentrate among the world’s largest producers.
Wood Mackenzie has raised its outlook for the global upstream oil and gas sector, estimating it could generate $495 billion in free cash flow in 2026 if crude averages $90 per barrel, more than doubling a prior forecast built on a $60 oil price assumption, according to OilPrice.
The revision follows a sharp jump in crude prices tied to the Middle East conflict, with Wood Mackenzie expecting production to drop by at least 3%, including roughly 3 million barrels per day of lost output from Iraq and a projected 2% cut to global LNG supply from damage to infrastructure in Qatar.
Wood Mackenzie expects the windfall to be concentrated among the biggest producers, with the 49 national and international oil companies it covers projected to capture $272 billion of the total free cash flow.
Despite the stronger near-term cash picture, Wood Mackenzie says the conflict does not change the sector’s longer-term production path, projecting average production to fall 30% between 2030 and 2040, while warning that most producers will need significant new investment to avoid steep declines.
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