The New Geopolitics of Oil.

00:50:32
https://www.youtube.com/watch?v=PHuOUCMNLJ0

Summary

TLDRThe video analyzes the pivotal role of oil in shaping modern civilization and its historical significance in economic development, wars, and the energy politics of superpowers. Oil has been a symbol of prosperity and an integral factor in industrial growth, but now faces a turning point due to climate change and the push for renewable energy. Countries like Saudi Arabia, a leading oil producer, are strategizing to diversify their economies amidst a potential decline in oil demand. The video's narrative explores the oil industry's adaptability, particularly in the face of the rising renewable energy sector, electrification of vehicles, and political shifts towards sustainability. It highlights pivotal historical moments such as the Shale Revolution's impact on U.S. energy independence and the role of OPEC in stabilizing oil prices. The narrative also reflects on the geopolitical impact of oil, its role in global energy politics, and the competitive strategies of oil companies in balancing between fossil fuels and green investments. Despite the challenges ahead, the video suggests that oil will continue to play a significant yet diminished role in the global energy mix as the transition to green energy accelerates.

Takeaways

  • 🛢️ Oil has been central to global economic growth and wars.
  • 🌍 Fossil fuels account for nearly 80% of global energy consumption.
  • 📉 The popularity and demand for oil are declining due to climate policies.
  • 🇸🇦 Saudi Arabia is a major player in the oil industry with significant influence.
  • 🔄 A transition to green energy and renewables is inevitable.
  • 🔋 The rise of electric vehicles challenges oil consumption.
  • 🛢️ Shale oil has made the U.S. a leading oil producer again.
  • 🌀 Oil prices have strong geopolitical influence.
  • 🌿 Renewables are growing competitively against fossil fuels.
  • 💡 Energy transition poses economic challenges for oil-dependent countries.

Timeline

  • 00:00:00 - 00:05:00

    Oil, as a crucial factor in civilization growth, faces a transitional phase influenced by climate policies and a shift towards greener energies, despite its longstanding economic significance.

  • 00:05:00 - 00:10:00

    Historical milestones in the oil industry from early exploitation to modern strategic importance show oil's role in shaping global dynamics, economy, and military actions, particularly during crises.

  • 00:10:00 - 00:15:00

    The oil boom in the mid-20th century clashed with fluctuating supply dynamics and the emergence of OPEC, shifting control from Western giants to national companies amid decolonization and nationalism.

  • 00:15:00 - 00:20:00

    Post-1970s oil crises reshaped energy policies, leading to diversification efforts and technological advancements to improve energy security amidst geopolitical anxieties.

  • 00:20:00 - 00:25:00

    The resurgence of US energy dominance via the Shale Revolution has redefined global oil production, challenging traditional powers like OPEC and altering market dynamics.

  • 00:25:00 - 00:30:00

    The energy transition, propelled by renewables and geopolitical power shifts, pressures oil-reliant economies to adapt amidst environmental and economic imperatives.

  • 00:30:00 - 00:35:00

    In Africa, economic instability and corruption underscore the challenges of over-reliance on oil, with countries like Nigeria illustrating the intertwined issues of governance and resource management.

  • 00:35:00 - 00:40:00

    The global energy transition raises stakes for oil-dependent economies, with projections of declining oil revenues threatening political and economic stability.

  • 00:40:00 - 00:45:00

    Oil companies, divided between national and private sectors, vary in their responsive strategies to sustainable energy trends while confronting new market realities.

  • 00:45:00 - 00:50:32

    Despite diversifying energy sources, oil remains pivotal globally, though its future role is contested with a growing emphasis on renewables and geopolitical challenges to traditional energy orders.

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Mind Map

Video Q&A

  • What did John D. Rockefeller say about oil companies?

    He supposedly said that the best business is a well-run oil company, and the second best is a badly run oil company.

  • Why has oil been important throughout history?

    Oil has been central to economic growth, wars, and the rise and fall of superpowers, providing energy for industrialization and modern civilization.

  • What are some challenges oil faces today?

    Oil faces challenges from climate change, the energy transition to renewables, and political pressures.

  • Why is oil still considered important despite environmental concerns?

    Oil provides high energy density, ease of transportation, and has a well-established infrastructure and reserves.

  • What role has Saudi Arabia played in the oil industry?

    Saudi Arabia is a major oil producer that has fueled its economy and political power with massive revenues from oil sales.

  • How have oil prices affected global politics?

    Oil prices have influenced geopolitical strategies, economic policies, and have been used as a tool for political leverage and coercion.

  • What effect does the Shale Revolution have on the oil market?

    The Shale Revolution in the US revolutionized the oil market by increasing production, contributing to energy independence, and challenging OPEC's influence.

  • How does the green energy transition impact oil-producing countries?

    Countries dependent on oil revenues face economic challenges as the world shifts towards green energy and renewables.

  • What industries could see growth due to decreased reliance on oil?

    Renewable energy, electric vehicles, and possibly nuclear energy industries may grow as reliance on oil diminishes.

  • What are the potential future roles of oil and other energy sources?

    Oil will remain important but in a lesser role, while renewables, electrification, and nuclear may become more dominant.

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Subtitles
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  • 00:00:01
    the best business in the world is a
  • 00:00:03
    well-run Oil Company the second best
  • 00:00:06
    business in the world is a badly run Oil
  • 00:00:09
    Company supposedly said John D
  • 00:00:11
    Rockefeller founder of Standard Oil
  • 00:00:13
    Company the first hedgman of the oil
  • 00:00:17
    industry throughout human history energy
  • 00:00:20
    has always been an integral factor in
  • 00:00:22
    the growth of quality of life and
  • 00:00:24
    economic development changes in
  • 00:00:26
    Civilization have largely been driven by
  • 00:00:29
    discovery of new more efficient energy
  • 00:00:31
    sources in the era of fossil fuels and
  • 00:00:34
    Industrial revolutions access to raw
  • 00:00:37
    materials determined the outcome of Wars
  • 00:00:39
    while also determining the cycle of rise
  • 00:00:41
    and fall of superpowers as Paul Kennedy
  • 00:00:44
    describes well Central to this story is
  • 00:00:47
    oil which helped build modern
  • 00:00:49
    civilization throughout the turbulent
  • 00:00:52
    20th
  • 00:00:53
    century nevertheless after 150 years of
  • 00:00:57
    spectacular success according to many
  • 00:01:00
    oil is entering its decline what was a
  • 00:01:03
    great Innovation for Rockefeller and
  • 00:01:05
    brought him wealth is today considered a
  • 00:01:08
    fuel of the past damaging the global
  • 00:01:10
    climate and powering autocratic
  • 00:01:14
    regimes like Co in the past oil must
  • 00:01:17
    reckon with the coming energy transition
  • 00:01:19
    motivated by climate policy and the
  • 00:01:21
    search for alternatives to fossil fuels
  • 00:01:24
    demographic growth along with improved
  • 00:01:26
    quality of life and industrialization
  • 00:01:28
    throughout history have always been
  • 00:01:30
    associated with increased energy
  • 00:01:32
    consumption meanwhile for decades the
  • 00:01:34
    global economy has become accustomed to
  • 00:01:37
    unlimited access to relatively cheap
  • 00:01:39
    readily available and cost- effective
  • 00:01:42
    hydrocarbons which have become a symbol
  • 00:01:44
    of prosperity and civilizational
  • 00:01:46
    development piter Prize winner and
  • 00:01:49
    author of the book The Prize Daniel
  • 00:01:51
    Jurgen argues that the impact of black
  • 00:01:53
    gold on the growth of Humanity's
  • 00:01:55
    Prosperity has contributed to the
  • 00:01:57
    phenomenon of hydrocarbon man which
  • 00:02:00
    flanks their dependence on the
  • 00:02:02
    resource but can we blame ourselves the
  • 00:02:05
    world is still full of places with
  • 00:02:07
    energy deficits and cheap energy is an
  • 00:02:09
    essential part of development high
  • 00:02:12
    energy density ease of Transportation
  • 00:02:14
    developments in extraction technology
  • 00:02:17
    diversification of suppliers significant
  • 00:02:19
    reserves and existing infrastructure
  • 00:02:22
    continue to argue for the continued use
  • 00:02:24
    of oil in the economy from
  • 00:02:26
    transportation to chemicals to Industry
  • 00:02:29
    today the Global oil Market is worth $2
  • 00:02:32
    trillion per year more than the next 10
  • 00:02:35
    Commodities combined oil accounts for
  • 00:02:38
    30% of the world's Energy Mix with
  • 00:02:41
    fossil fuels accounting for nearly 80%
  • 00:02:43
    of energy
  • 00:02:45
    consumption so a relic of the past or a
  • 00:02:48
    stable foundation for the future what is
  • 00:02:51
    the truth about oil let's find out
  • 00:02:54
    welcome to the 20s report
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    description and get up to four extra
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    months completely
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    free oil achieved remarkable success in
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    the past 150 years for decades it has
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    provided the right balance between
  • 00:04:25
    security of supply cost Effectiveness
  • 00:04:28
    and especially compared to co
  • 00:04:30
    environmental impact replacing such a
  • 00:04:33
    competitive energy source is extremely
  • 00:04:35
    difficult but oil has now arrival or a
  • 00:04:38
    group of Rivals under the common Banner
  • 00:04:40
    of green energy from the Sun wind or
  • 00:04:43
    water these sources do not guarantee
  • 00:04:46
    such good energy conversion but climate
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    awareness along with technological
  • 00:04:50
    development is improving the situation
  • 00:04:52
    of renewable energy sources practically
  • 00:04:55
    every year while rejecting such absurd
  • 00:04:58
    ideas as degrowth that is halting
  • 00:05:01
    development and reducing energy
  • 00:05:03
    consumption it should be noted that
  • 00:05:05
    ambitious climate policies and the
  • 00:05:06
    growing competitiveness of Renewables
  • 00:05:09
    are creating a new Dynamic that is
  • 00:05:11
    changing the structure of global energy
  • 00:05:13
    demand to the detriment of fossil fuels
  • 00:05:16
    in anticipation of the next energy
  • 00:05:18
    transition in human history the
  • 00:05:20
    importance of oil which fueled past War
  • 00:05:23
    prosperity and the era of hyper
  • 00:05:25
    globalization is therefore evolving in
  • 00:05:28
    the eyes of consumers producers and
  • 00:05:30
    polic
  • 00:05:31
    makers the modern history of oil began
  • 00:05:34
    in the second half of the 19th century
  • 00:05:37
    when the Western World in the spirit of
  • 00:05:39
    positivism experienced unprecedented
  • 00:05:42
    Economic Development fueled by
  • 00:05:44
    urbanization and the growth of
  • 00:05:45
    industrial production from the beginning
  • 00:05:48
    this Revolution was driven by the
  • 00:05:49
    innovation of the steam engine and the
  • 00:05:51
    use of fossil fuels initially it was Co
  • 00:05:54
    that became the symbol of the Industrial
  • 00:05:56
    Revolution Over time however it was
  • 00:05:59
    replaced by oil which in the form of
  • 00:06:02
    kerosine made it possible among other
  • 00:06:04
    things to light growing cities more
  • 00:06:06
    efficiently and
  • 00:06:08
    cheaply the oil fever started mainly in
  • 00:06:11
    the United States one of the oil
  • 00:06:13
    Pioneers was edin Drake basically a
  • 00:06:16
    walking symbol of the Pennsylvania o
  • 00:06:18
    Revolution it wasn't long before the
  • 00:06:20
    1880s when Pennsylvania produced nearly
  • 00:06:23
    80% of the world's oil later refineries
  • 00:06:26
    and oil wells began to mushroom across
  • 00:06:28
    the country this was also the time of
  • 00:06:31
    Rockefeller who by the end of the
  • 00:06:33
    century had become the richest man in
  • 00:06:34
    the United States and perhaps the world
  • 00:06:38
    however his Monopoly was broken in 1911
  • 00:06:41
    for the efforts of Theodor Roosevelt but
  • 00:06:44
    its remnants in the form of Exon Mobile
  • 00:06:46
    and Chevron still play a leading role in
  • 00:06:49
    the global oil
  • 00:06:50
    Market the Americans success was
  • 00:06:53
    undeniable and let Europeans to explore
  • 00:06:56
    and exploit deposits in their own
  • 00:06:58
    colonies in 19 197 the British formed
  • 00:07:01
    the Anglo Persian Oil Company after
  • 00:07:03
    obtaining a license to explore for oil
  • 00:07:06
    in Iran the oil would prove essential to
  • 00:07:09
    consolidate the dominance of the royal
  • 00:07:10
    Navy led by Admiral Junie Fisher in the
  • 00:07:13
    year of the outbreak of the first world
  • 00:07:15
    war London pushed through the
  • 00:07:17
    nationalization of the company which
  • 00:07:19
    only confirmed the Strategic nature of
  • 00:07:21
    the oil one of the main proponents of
  • 00:07:24
    this move was Winston Churchill the lord
  • 00:07:27
    of the admirality recognized that Naval
  • 00:07:29
    Supremacy on which the power of the
  • 00:07:31
    British Empire dependent ultimately
  • 00:07:34
    dependent on access to oil Lord Ken on
  • 00:07:38
    the other hand even declared that the
  • 00:07:39
    onton had ridden to Victory on a wave of
  • 00:07:43
    oil even more than on the sea it was
  • 00:07:46
    evident in the land domain in 1914 the
  • 00:07:49
    British army began the war with fewer
  • 00:07:51
    than 900 internal combustion vehicles
  • 00:07:54
    and ended it with nearly 880,000 another
  • 00:07:58
    50,000 were delivered to the US Army in
  • 00:08:00
    April 1917 alone the Advent of the
  • 00:08:03
    internal combustion engine and the
  • 00:08:05
    enormous potential of Civilian
  • 00:08:07
    Transportation gave impetus to the next
  • 00:08:09
    stage of oil fever and the sege of new
  • 00:08:12
    deposits of the resource Jin believes
  • 00:08:15
    that the invention of the internal
  • 00:08:16
    combustion engine marked a new stage in
  • 00:08:19
    human civilization in which oil would
  • 00:08:22
    play a primary role after World War I
  • 00:08:26
    the 1930s were marked by a series of
  • 00:08:28
    discoveries in the Middle East and the
  • 00:08:30
    granting of more concessions to Western
  • 00:08:33
    companies in 1948 oil was discovered in
  • 00:08:37
    the alaha region of Saudi Arabia which
  • 00:08:39
    was to become the most important
  • 00:08:41
    producer of black gold in the Middle
  • 00:08:43
    East the first half of the 20th century
  • 00:08:46
    was thus marked by the growing strategic
  • 00:08:48
    importance of oil in the eyes of the
  • 00:08:50
    world powers during the world wars the
  • 00:08:53
    Black Gold served as a driving force
  • 00:08:55
    behind maneuver Warfare a revolution in
  • 00:08:58
    military Aviation
  • 00:08:59
    and Naval battles on an unprecedented
  • 00:09:02
    scale access to the raw material was
  • 00:09:04
    essential to gaining dominance over
  • 00:09:07
    Maritime communication routes and to
  • 00:09:09
    mechanizing the largest armies in human
  • 00:09:11
    history among many other factors the
  • 00:09:14
    lack of raw materials was one of the
  • 00:09:15
    main reasons for the defeat of the Third
  • 00:09:18
    Reich and Japan in the war against the
  • 00:09:20
    Allies on the other side of the Atlantic
  • 00:09:23
    the US supplied six out of every seven
  • 00:09:26
    barrels of oil used to defeat Germany
  • 00:09:29
    the war of attration from North Africa
  • 00:09:31
    to the Eastern front to the Pacific War
  • 00:09:34
    was to be decided by access to the raw
  • 00:09:36
    materials that fueled the Allied War
  • 00:09:39
    Machine the story of post-war economic
  • 00:09:42
    Miracles is also very much the story of
  • 00:09:44
    fossil fuels particularly oil which has
  • 00:09:48
    become a symbol of prosperity and
  • 00:09:50
    success for Western democracies between
  • 00:09:53
    1960 and 1972 alone demand for Black
  • 00:09:57
    Gold Rose from 19 to 44 million barrels
  • 00:10:01
    per day in turn from 1948 to the early
  • 00:10:05
    1970s oil consumption in the US Europe
  • 00:10:08
    and Japan increased three 14 and
  • 00:10:12
    137 times respectively during the same
  • 00:10:15
    period the number of cars on the road
  • 00:10:17
    globally increased from 19 million to
  • 00:10:21
    161 million the transformation from coal
  • 00:10:25
    to oil took place in just two decades
  • 00:10:28
    while back in 195 55 coal accounted for
  • 00:10:31
    75% of Western Europe's Global energy
  • 00:10:34
    consumption by 1972 the share was only
  • 00:10:38
    22% at the time oil accounted for 60% of
  • 00:10:42
    the global mix demand for oil was so
  • 00:10:44
    great that it soon became apparent that
  • 00:10:46
    domestic production especially in the
  • 00:10:48
    United States could not meet the needs
  • 00:10:51
    of post-war economic
  • 00:10:53
    boom in 1973 just before the first oil
  • 00:10:57
    shock more than 13d of the the oil was
  • 00:10:59
    imported from abroad largely from the
  • 00:11:02
    Middle East concerns about the stability
  • 00:11:04
    of the region were also exacerbated by
  • 00:11:06
    the suest crisis of
  • 00:11:08
    1956 the West recognizing the
  • 00:11:11
    instability the ever increasing
  • 00:11:13
    importance of oil and the growing
  • 00:11:15
    audible talk of unequal profit sharing
  • 00:11:18
    bet on consolidation this is how an
  • 00:11:20
    agreement was reached between the major
  • 00:11:22
    Western oil companies the Seven Sisters
  • 00:11:26
    this is what the agreement reached
  • 00:11:28
    between the largest Western oil magnates
  • 00:11:30
    was later called the sisters indeed
  • 00:11:32
    shook the global oil Market five
  • 00:11:35
    American and two European companies
  • 00:11:37
    thanks to concessions and the support of
  • 00:11:39
    Western politicians skillfully
  • 00:11:41
    manipulated oil production in order to
  • 00:11:44
    maximize profits often at the expense of
  • 00:11:46
    the countries where the production took
  • 00:11:48
    place however Global Trends were already
  • 00:11:51
    playing against them beginning in the
  • 00:11:55
    1950s with a rising tide of nationalism
  • 00:11:58
    oil producing countries began to demand
  • 00:12:00
    greater involvement in managing their
  • 00:12:03
    resources that's why in 1960 Venezuela
  • 00:12:06
    Saudi Arabia Kuwait Iraq and Iran formed
  • 00:12:10
    the OPEC cartel to coordinate their
  • 00:12:13
    activities and increase their bargaining
  • 00:12:15
    power this event laid the foundation for
  • 00:12:18
    the era of national oil companies no's
  • 00:12:21
    which would eventually dominate the
  • 00:12:23
    global market the process of
  • 00:12:25
    decolonization combined with growing
  • 00:12:27
    nationalism contributed to Fierce
  • 00:12:29
    conflicts over the control of natural
  • 00:12:32
    resources especially oil which became a
  • 00:12:35
    symbol of sovereignty for many countries
  • 00:12:38
    as a result the balance of power began
  • 00:12:40
    to shift dramatically against the Seven
  • 00:12:42
    Sisters already in the 1970s one of the
  • 00:12:46
    first SI was the imposition of an oil
  • 00:12:48
    export embargo by Arab countries as a
  • 00:12:51
    result of the 1967 6-day war and one of
  • 00:12:55
    the first countries to make new demands
  • 00:12:57
    on Western companies was mamar Gaddafi's
  • 00:12:59
    Libya eventually in 1972 an agreement
  • 00:13:03
    was signed in tan to change the division
  • 00:13:06
    of ownership with countries taking
  • 00:13:08
    majority stakes in domestic oil
  • 00:13:10
    production unlike the OPEC cartel
  • 00:13:13
    Western companies were unable to
  • 00:13:15
    cordinate and lacked the support of
  • 00:13:17
    their own governments significantly by
  • 00:13:20
    1980 the share of reserves under private
  • 00:13:23
    sector control had fallen from 85% to
  • 00:13:27
    only 12% and the the imposition of the
  • 00:13:29
    oil embargo in October
  • 00:13:32
    1973 which began the first oil shock of
  • 00:13:34
    the decade caused prices to rise 400% in
  • 00:13:38
    just 6
  • 00:13:40
    months a key factor in the first oil
  • 00:13:42
    crisis was the supply deficit in the
  • 00:13:45
    west which partly explains the fact that
  • 00:13:47
    by the early 1970s the available oil
  • 00:13:50
    fields were almost 99% depleted this
  • 00:13:54
    situation in contrast to the failure of
  • 00:13:56
    the Embargo enabled the Arab countries
  • 00:13:58
    to to exert pressure on Israel's allies
  • 00:14:01
    during the sixth day war it should be
  • 00:14:04
    remembered that from 1949 until the
  • 00:14:07
    outbreak of the oil crisis World demand
  • 00:14:10
    for oil increased more than
  • 00:14:12
    fivefold the oil shock led the Jimmy
  • 00:14:15
    Carter Administration to make energy
  • 00:14:17
    security one of its top priorities and
  • 00:14:20
    one of the measures taken was the
  • 00:14:21
    announcement of the Carter Doctrine on
  • 00:14:23
    freedom of Passage through the straight
  • 00:14:25
    of ormus and an increased us role in the
  • 00:14:28
    region
  • 00:14:29
    this was largely in response to another
  • 00:14:31
    oil shock that erupted in 1979 in the
  • 00:14:35
    wake of the Iranian Revolution in this
  • 00:14:37
    case as in later years it was OPEC that
  • 00:14:40
    stabilized the market by increasing
  • 00:14:42
    production the energy crisis of the
  • 00:14:44
    1970s vividly demonstrated what a
  • 00:14:47
    powerful geopolitical coercive tool oil
  • 00:14:50
    could be the West had to learn the right
  • 00:14:54
    lessons and it did to prevent a repeat
  • 00:14:57
    Western countries LED by the United
  • 00:14:59
    States invested in creating strategic
  • 00:15:02
    oil reserves and developing new
  • 00:15:04
    extraction Technologies some countries
  • 00:15:06
    such as France decided to develop
  • 00:15:08
    nuclear power in order to achieve energy
  • 00:15:11
    Independence so it was the oil shocks
  • 00:15:13
    that defined Global energy policy for
  • 00:15:15
    decades to come geopolitical uncertainty
  • 00:15:18
    motivated countries to secure their
  • 00:15:20
    supplies and increasingly drove
  • 00:15:22
    technological
  • 00:15:24
    development the 1980s in contrast to the
  • 00:15:27
    previous decade was a period of over
  • 00:15:29
    production and falling prices that
  • 00:15:31
    largely toppled the Communist Regime in
  • 00:15:33
    Moscow and triggered de crisis in the
  • 00:15:36
    global South the first Gulf War and US
  • 00:15:39
    Operation Desert Storm were also driven
  • 00:15:42
    by the desire to secure the region and
  • 00:15:44
    stabilize the oil Market as well as to
  • 00:15:46
    strengthen the US military position in
  • 00:15:48
    the region it can be said that the post
  • 00:15:51
    Cold War interventions in the Middle
  • 00:15:53
    East were to some extent a continuation
  • 00:15:55
    of the Eisenhower and Carter doctrines
  • 00:16:00
    then at the turn of the 20th century
  • 00:16:02
    came the era of hyper globalization
  • 00:16:04
    which triggered a boom in the oil Market
  • 00:16:07
    with crude prices rising from $35 per
  • 00:16:10
    Barrow to 147 in just 8 years peaking on
  • 00:16:15
    the eve of the financial crisis the post
  • 00:16:18
    2008 price collapse prompted
  • 00:16:20
    intervention by the OPEC cartel which as
  • 00:16:22
    in the past stabilized the market the
  • 00:16:25
    situation became even more tense when
  • 00:16:27
    oil revenues proved necessary to bring
  • 00:16:29
    situation under control after the Arab
  • 00:16:31
    Spring and the wave of protests in 2011
  • 00:16:34
    it can be said that the beginning of the
  • 00:16:36
    21st century reflects well the
  • 00:16:39
    cyclicality that has always been
  • 00:16:41
    inherent in the oil
  • 00:16:43
    Market the inherent part of the market
  • 00:16:45
    was also United States continued
  • 00:16:48
    importance the Americans dominated oil
  • 00:16:51
    production at the beginning and
  • 00:16:52
    throughout the 20th century but over
  • 00:16:55
    time their position as the leading
  • 00:16:57
    producer was trumped by Saudi Arabia and
  • 00:17:00
    the USSR and then by Russia meanwhile in
  • 00:17:03
    the second decade of the 21st century
  • 00:17:05
    the us reemerged as the largest producer
  • 00:17:08
    of fossil fuels reclaiming the palm of
  • 00:17:11
    energy Primacy the key to this success
  • 00:17:14
    they not to be the Shale Revolution
  • 00:17:16
    which according to lar Summers was one
  • 00:17:19
    of the most important spurts of growth
  • 00:17:21
    after the banking crash and Daniel jurin
  • 00:17:24
    in his latest book the new map calls it
  • 00:17:27
    the most important energy innovation of
  • 00:17:29
    the 21st century in addition to energy
  • 00:17:32
    Independence the US Shale Rush has
  • 00:17:35
    revolutionized the global oil market and
  • 00:17:37
    weakened the OPEC
  • 00:17:39
    cartel the old Maxim about oil flowing
  • 00:17:42
    from east to west was slowly becoming
  • 00:17:45
    history as recently as 2005 the US was
  • 00:17:48
    importing as much as 12 million barrels
  • 00:17:51
    per day accounting for half of the
  • 00:17:53
    country's budget deficit 10 years later
  • 00:17:56
    after a wave of investment in the peran
  • 00:17:58
    base in fields production jumped nearly
  • 00:18:01
    100% to 15 million barrels per day in
  • 00:18:05
    Texas production even tripled in the 5
  • 00:18:08
    years to 2014 but despite its status as
  • 00:18:11
    an energy superpower the lack of spare
  • 00:18:14
    production capacity makes it difficult
  • 00:18:17
    to actively shape and stabilize the
  • 00:18:19
    market in case of sudden crisis the
  • 00:18:22
    aformentioned Strategic petroleum
  • 00:18:24
    Reserve is helpful but it is the
  • 00:18:26
    collective policy of the OBC cartel that
  • 00:18:29
    has ultimate power to influence the
  • 00:18:31
    world oil price all the more so because
  • 00:18:34
    in response to the American Revolution
  • 00:18:35
    and the sudden drop in crude oil prices
  • 00:18:38
    in 2016 OPEC plus format was created I.E
  • 00:18:42
    an OPEC cartel supplemented by the
  • 00:18:45
    second largest oil producer after the
  • 00:18:47
    United States that is the Russian
  • 00:18:50
    Federation however OPEC plus is by no
  • 00:18:53
    means a solid creation the outbreak of
  • 00:18:56
    the covid pandemic reduced the demand
  • 00:18:58
    for oil by up to
  • 00:18:59
    30% this led to a situation in which the
  • 00:19:02
    Saudis and the Russians were at each
  • 00:19:04
    other's frauds in the spring of 2020 as
  • 00:19:08
    a result of the price war that ensued
  • 00:19:10
    oil prices even went into negative
  • 00:19:12
    territory the months of Crisis
  • 00:19:15
    demonstrated the fragility of OPEC plus
  • 00:19:17
    and the problem of reconciling
  • 00:19:19
    conflicting interests which to this day
  • 00:19:22
    makes it difficult to define a common
  • 00:19:25
    strategy but even Co was not as
  • 00:19:28
    devastating to the energy Market as what
  • 00:19:30
    happened 2 years later the year 2022 and
  • 00:19:33
    the outbreak of war in Ukraine caused
  • 00:19:35
    the first Global energy crisis according
  • 00:19:38
    to the International Energy agency the
  • 00:19:41
    following months brought a surge in oil
  • 00:19:43
    prices providing exporting countries
  • 00:19:45
    with historic revenues from the sale of
  • 00:19:48
    Black Gold the global state of the
  • 00:19:51
    market was so important to the guarantor
  • 00:19:54
    of the system the USA that in order to
  • 00:19:57
    protect it it was willing to allow the
  • 00:19:59
    player with whom they were waging a
  • 00:20:00
    proxy war the Russian Federation to keep
  • 00:20:03
    its share in the profits Washington and
  • 00:20:06
    the G7 put an ineffective price cap on
  • 00:20:08
    Russian oil at a high of $60 and what's
  • 00:20:12
    more it has constantly opposed Ukrainian
  • 00:20:14
    missile attacks on Russian refineries
  • 00:20:17
    2022 was also a record year for OPEC
  • 00:20:19
    plus countries which sold
  • 00:20:22
    888 billion worth of oil the cartel
  • 00:20:26
    controls more than 40% of the market and
  • 00:20:29
    80% of the oil reserves while having
  • 00:20:31
    some of the lowest production costs this
  • 00:20:34
    share can only grow projections show
  • 00:20:37
    that by 2050 up to 60% of the oil in the
  • 00:20:40
    shrinking Market could be supplied by
  • 00:20:43
    Cal members
  • 00:20:44
    alone if it survives until then because
  • 00:20:48
    the stability of the organization is not
  • 00:20:49
    guaranteed and could be shaken by the
  • 00:20:51
    significant differences in production
  • 00:20:53
    costs between OPEC members for example
  • 00:20:56
    while Saudi Arabia spends only three 3
  • 00:20:58
    to4 to produce one barrel of oil
  • 00:21:01
    Venezuela pays up to five times as much
  • 00:21:05
    outside OPEC the largest reserves are in
  • 00:21:08
    Europe's North Sea Canada's star Sands
  • 00:21:11
    the Gulf of Mexico and Brazil's offshore
  • 00:21:14
    deposits however their future
  • 00:21:16
    exploitation is in question and will
  • 00:21:18
    depend on the pace of the green
  • 00:21:20
    transition and indeed the renewable
  • 00:21:23
    energy Revolution poses a formidable
  • 00:21:26
    challenge to each of the major oil
  • 00:21:28
    producers and an almost existential
  • 00:21:30
    challenge to those whose economies are
  • 00:21:32
    entirely based on
  • 00:21:34
    hydrocarbons how do the major players in
  • 00:21:37
    the oil game see their future let's see
  • 00:21:41
    let's start with a country that probably
  • 00:21:42
    comes to mind first when you think of
  • 00:21:44
    oil Saudi Arabia is almost synonymous
  • 00:21:47
    with oil since the 1970s the Saudis have
  • 00:21:50
    generated an estimated 10 trillion plus
  • 00:21:53
    dollars in revenues from oil sales
  • 00:21:56
    laying the foundation for their Reg
  • 00:21:58
    power and the wealth of what was once an
  • 00:22:01
    extremely poor society today rather than
  • 00:22:04
    burying its head in the sand riat is
  • 00:22:07
    looking for solutions to the uncertain
  • 00:22:09
    future of its Golden
  • 00:22:11
    Goose overarching to the kingdom
  • 00:22:14
    strategy is Saudi aramco which produces
  • 00:22:17
    up to 11 million barrels per day or 10%
  • 00:22:20
    of global demand what's more until
  • 00:22:22
    recently the company pled to increase
  • 00:22:24
    its production capacity to 13 million
  • 00:22:27
    barers per day by the end of the decade
  • 00:22:30
    in the historic year of 2022 Saudi
  • 00:22:32
    aramco reported profits of 161 billion
  • 00:22:37
    its strength comes in part from very low
  • 00:22:40
    costs the saudi's goal for the coming
  • 00:22:43
    decades is to produce the cleanest and
  • 00:22:45
    cheapest power of oil possible in the
  • 00:22:47
    face of weakening demand today
  • 00:22:50
    production costs are estimated to be as
  • 00:22:52
    low as $3 per barrel or just 10% of the
  • 00:22:56
    cost of North Sea operations
  • 00:22:59
    but with big margins come big plans in
  • 00:23:02
    order to sustain the ambitious plans to
  • 00:23:05
    diversify the Saud economy and cover the
  • 00:23:08
    rush of public investment with projects
  • 00:23:10
    like neom at the Forefront the oil price
  • 00:23:13
    needed to balance the budget is set
  • 00:23:16
    closer to $80 per barrel after 2022 this
  • 00:23:20
    ceiling was generally reached but before
  • 00:23:23
    that oil cost around $40 for many years
  • 00:23:28
    overall all the financial health and
  • 00:23:30
    profitability of the oil sector has a
  • 00:23:32
    critical impact on the fiscal stability
  • 00:23:35
    and legitimacy of the monarchy in the
  • 00:23:37
    eyes of the public over the years riat
  • 00:23:40
    has provided tens of billions of dollars
  • 00:23:42
    in fuel subsidies to its citizens it
  • 00:23:45
    should come as no surprise then that
  • 00:23:47
    despite its average size Saudi Arabia is
  • 00:23:50
    the world's 11th largest energy
  • 00:23:53
    consumer to continue our Pol Tre analogy
  • 00:23:57
    the Saudis also try not to put all the
  • 00:23:59
    EGS in one basket therefore the new
  • 00:24:02
    strategy is to diversify and use
  • 00:24:04
    Renewables to meet domestic demand while
  • 00:24:07
    reorienting the oil sector towards
  • 00:24:09
    exports to capture the shrinking Market
  • 00:24:12
    in addition Saudi aramco wants to focus
  • 00:24:15
    on decarbonizing oil production by
  • 00:24:17
    developing CO2 capture and storage
  • 00:24:20
    Technologies and investing in green
  • 00:24:22
    hydrogen experts point out that riat is
  • 00:24:25
    well positioned to become a leader in
  • 00:24:27
    the new era of electric ification thanks
  • 00:24:29
    to favorable conditions for solar power
  • 00:24:32
    investment Capital available technology
  • 00:24:35
    and favorable geology the ambitious goal
  • 00:24:38
    is to generate 50% of its electricity
  • 00:24:40
    from Renewables by 2030 and more than 50
  • 00:24:44
    fold increase from today the Saudis are
  • 00:24:47
    aiming to join other powers such as the
  • 00:24:49
    US and China as the top fre countries in
  • 00:24:52
    terms of new renewable capacity in total
  • 00:24:55
    the Saudi green initiative is expected
  • 00:24:57
    to allocate $200 billion for this
  • 00:25:00
    Purpose By 2030 another way to
  • 00:25:03
    decarbonize production is through the
  • 00:25:05
    plant planting of 10 billion trees in
  • 00:25:08
    addition unlike other exporting
  • 00:25:10
    countries in Africa or Latin America
  • 00:25:13
    riat has hatched against a commodity
  • 00:25:15
    bust by creating a $620 billion public
  • 00:25:19
    investment fund to help meet the
  • 00:25:21
    monarchy's Ambitions outlined in its
  • 00:25:23
    Saudi Vision 2040 plan looking more
  • 00:25:27
    broadly at the middle midd east region
  • 00:25:29
    relatively successful diversification
  • 00:25:31
    has been carried out by the United Arab
  • 00:25:34
    Emirates where the share of oil and gas
  • 00:25:36
    sales in GDP over the past 20 years
  • 00:25:39
    dropped by half the Emirates like Saudi
  • 00:25:43
    Arabia also has an $800 billion
  • 00:25:46
    Sovereign wealth fund as well as
  • 00:25:48
    separate company mubadala which manages
  • 00:25:50
    $300 billion in green investment assets
  • 00:25:54
    other Gulf countries aware of the
  • 00:25:56
    transition challenges such as Qatar and
  • 00:25:59
    Oman have focused on co2 sequestration
  • 00:26:03
    or carbon capture as well as hydrogen
  • 00:26:06
    development this however does not mean
  • 00:26:08
    that the entire region is doing well the
  • 00:26:11
    share of hydrocarbons in the structure
  • 00:26:13
    of each country's economy continues to
  • 00:26:15
    be alarmingly high and diversification
  • 00:26:18
    is going slowly moreover solar energy
  • 00:26:22
    which seems to be the main hope for the
  • 00:26:24
    region still accounts for less than 3%
  • 00:26:27
    of energy production and fossil fuels
  • 00:26:30
    remain a cheap and quick source for
  • 00:26:32
    legitimizing autocratic regimes
  • 00:26:34
    accounting for 90% of the middle east's
  • 00:26:37
    energy
  • 00:26:39
    generation in addition to the cost of
  • 00:26:41
    production the carbon intensity of
  • 00:26:43
    production will play an important role
  • 00:26:45
    in the future of oil producers while
  • 00:26:48
    Saudi Arabia and other Gulf countries
  • 00:26:50
    stand out in a positive light other
  • 00:26:52
    exporters such as Algeria and Venezuela
  • 00:26:55
    emit up to four times more CO2
  • 00:26:57
    throughout the the oil extraction and
  • 00:26:59
    processing
  • 00:27:00
    mechanism less expected winners of the
  • 00:27:03
    next decade may be Brazil and just
  • 00:27:06
    800,000 strong Guyana where oil
  • 00:27:09
    production is expected to rise to as
  • 00:27:11
    much as 1.5 million bar per day in the
  • 00:27:14
    next few years thanks to investments in
  • 00:27:17
    offshore Fields Argentina suffering from
  • 00:27:20
    a chronic economic crisis on the other
  • 00:27:22
    hand as the fourth largest Shale oil
  • 00:27:25
    fields in the world it is this type of
  • 00:27:28
    cruit that will become increasingly
  • 00:27:29
    important due to the production
  • 00:27:31
    flexibility resulting from the short
  • 00:27:33
    life of new Fields overall Latin America
  • 00:27:37
    will be one of the few regions where o
  • 00:27:39
    production is expected to increase in
  • 00:27:41
    the coming years but the general
  • 00:27:43
    prospects are mixed unlike the Middle
  • 00:27:46
    East the continent seems less prepared
  • 00:27:49
    for long-term changes the sector is
  • 00:27:51
    dominated by national energy companies
  • 00:27:54
    which are the backbone of economies and
  • 00:27:56
    have a decisive influence on the fiscal
  • 00:27:58
    health and thus political stability we
  • 00:28:00
    can see this for example from events in
  • 00:28:04
    Venezuela corruption inefficient
  • 00:28:06
    management and lack of Technology have
  • 00:28:08
    not only prevented the use of profits
  • 00:28:10
    for economic development but have also
  • 00:28:13
    weakened the competitive position of
  • 00:28:15
    many countries examples include Ecuador
  • 00:28:17
    which depends on oil revenues for 1/4 of
  • 00:28:20
    its budget or Colombia where 50% of
  • 00:28:23
    exports are fossil fuel sales another
  • 00:28:26
    victim of the lack of competence is
  • 00:28:28
    Mexico's PMX which is struggling with a
  • 00:28:31
    $100 billion debt and lackes the
  • 00:28:34
    technology to exploit new deposits that
  • 00:28:36
    is why in the long run Latin America is
  • 00:28:39
    poised to lose market share and budget
  • 00:28:41
    revenues according to one forecast oil
  • 00:28:44
    export revenues across the continent
  • 00:28:46
    Could Fall by as much as $6.8 trillion
  • 00:28:50
    by
  • 00:28:51
    2035 the lack of diversification
  • 00:28:54
    strategy and the cion of Foreign
  • 00:28:56
    Exchange reserves could lead not only to
  • 00:28:58
    De crisis and a decline in the quality
  • 00:29:01
    of life but also to political
  • 00:29:03
    instability and migratory
  • 00:29:06
    movements but the crisis caused by the
  • 00:29:08
    energy transition might be most acute
  • 00:29:11
    somewhere else namely in Africa the main
  • 00:29:15
    problems of the countries of the black
  • 00:29:17
    continent suffering from the commodity
  • 00:29:19
    disaster are similar only on a larger
  • 00:29:22
    scale they include corruption political
  • 00:29:25
    instability lack of diversification
  • 00:29:27
    strategy and dependence on subsidies
  • 00:29:30
    Nigeria with a population of 220 million
  • 00:29:34
    where 40% of people still live in
  • 00:29:36
    extreme poverty and where the population
  • 00:29:38
    is expected to nearly double by 2050 is
  • 00:29:41
    a prime example of a country suffering
  • 00:29:43
    from a paradox of oil wealth for decades
  • 00:29:47
    after oil was discovered in the 1950s
  • 00:29:50
    this former British colony held the
  • 00:29:52
    title of Africa's largest oil producer
  • 00:29:55
    picking at 2.5 million bar per day in
  • 00:29:59
    2005 after years of exploitation
  • 00:30:02
    corruption mismanagement and Trum and
  • 00:30:05
    oil theft production has nearly halfed
  • 00:30:08
    revenue from the sale of Black Gold
  • 00:30:10
    accounts for more than 50% of the
  • 00:30:12
    national budget and up to 80% of exports
  • 00:30:15
    which are also the main source of heart
  • 00:30:18
    currency political instability has
  • 00:30:20
    forced most western companies such as
  • 00:30:23
    shell to abandon weals in Niger Delta
  • 00:30:26
    and focus their attention on costly but
  • 00:30:29
    safer offshore deposits the problem
  • 00:30:32
    stems largely from the activities of
  • 00:30:33
    terrorist and criminal groups that take
  • 00:30:36
    advantage of the weakness of the
  • 00:30:37
    Nigerian military according to one
  • 00:30:40
    estimate oil fft by organized groups may
  • 00:30:43
    be as high as 20% of total production as
  • 00:30:47
    a result crude oil extracted from
  • 00:30:49
    Nigeria's offshore Fields is up to twice
  • 00:30:52
    as expensive as in traditional Fields
  • 00:30:55
    where the cost per barrel is about $15
  • 00:30:58
    in addition years of exploitation have
  • 00:31:00
    caused irreversible environmental damage
  • 00:31:03
    that continues to affect local
  • 00:31:05
    communities analysts at risk. energy
  • 00:31:08
    expect Nigeria's oil production to
  • 00:31:09
    decline by as much as 70% by
  • 00:31:14
    2040 one immediate solution may be to
  • 00:31:17
    diversify into liquefied natural gas or
  • 00:31:20
    LNG demand for which is also expected to
  • 00:31:22
    grow over the next decade the transition
  • 00:31:25
    will also be particularly acute given
  • 00:31:27
    the exist existence of some of the
  • 00:31:28
    largest fuel subsidies in the world one
  • 00:31:31
    striking statistic shows that by 2022
  • 00:31:34
    the Lagos government have allocated more
  • 00:31:36
    resources to this sector than to
  • 00:31:39
    Education Health and social welfare
  • 00:31:41
    combined in some Nigeria is an example
  • 00:31:44
    of a country suffering from a resource
  • 00:31:46
    debacle that over the years have
  • 00:31:48
    weakened State structures exacerbated
  • 00:31:51
    corruption and made political legitimacy
  • 00:31:54
    dependent on access to cheap oil this
  • 00:31:57
    phenomenon is sometimes referred to as
  • 00:31:59
    Dutch disease given its demographics and
  • 00:32:03
    the degree of dependence between oil
  • 00:32:04
    export revenues and economic growth
  • 00:32:06
    Nigeria could become a major source of
  • 00:32:09
    instability in Africa and a geopolitical
  • 00:32:12
    challenge for the entire world in the
  • 00:32:14
    coming
  • 00:32:15
    years all this shows that most oil
  • 00:32:18
    producing countries especially those in
  • 00:32:20
    the early stages of Economic Development
  • 00:32:22
    are the most vulnerable to the
  • 00:32:24
    consequences of the green transition and
  • 00:32:26
    the potential Twilight of the oil era
  • 00:32:29
    OPEC defends itself against the Green
  • 00:32:31
    Trend by claiming that instead of
  • 00:32:33
    improving the global situation the
  • 00:32:35
    revolution will only increase global
  • 00:32:38
    inequality for a deficit in access to
  • 00:32:40
    cheap energy as energy poverty remains
  • 00:32:43
    widespread on the other hand the
  • 00:32:45
    examples of Nigeria Venezuela and Iran
  • 00:32:48
    show that instead of improving the
  • 00:32:50
    domestic situation an abundance of oil
  • 00:32:52
    often leads to cementing dysfunctional
  • 00:32:55
    autocratic regimes providing them with
  • 00:32:57
    few fuel for decades of
  • 00:33:00
    rule but the oil Market is not just made
  • 00:33:03
    up of State actors oil reach Heavens
  • 00:33:06
    like Arabia it's also the companies that
  • 00:33:09
    manage Upstream extraction and
  • 00:33:10
    production as well as refining and
  • 00:33:13
    distribution
  • 00:33:14
    Downstream above all to understand the
  • 00:33:17
    sector's characteristics it is crucial
  • 00:33:19
    to distinguish between National and
  • 00:33:21
    private transnational oil companies
  • 00:33:24
    which lost their Market position in the
  • 00:33:25
    wave of nationalization and
  • 00:33:27
    decolonization of the 1960s and 1970s
  • 00:33:31
    looking at the figures it seems that the
  • 00:33:33
    national oil companies which control
  • 00:33:35
    about 50% of oil production and 60% of
  • 00:33:39
    reserves will play a major role in the
  • 00:33:41
    era of declining oil the dominance of
  • 00:33:44
    national companies is illustrated by the
  • 00:33:46
    fact that on average 50% of global oil
  • 00:33:49
    revenues have gone to National budgets
  • 00:33:51
    in recent years prior to the 2022 energy
  • 00:33:55
    crisis the oil sector appeared to have a
  • 00:33:57
    serious problem since 2014 declining
  • 00:34:01
    demand has led to a steady decrease in
  • 00:34:03
    the level of investment in field
  • 00:34:05
    discoveries and new technologies which
  • 00:34:07
    has affected the size of available
  • 00:34:09
    reserves over the past decade the oil
  • 00:34:12
    and gas sector has been the worst
  • 00:34:14
    performer in the entire New York S&P 500
  • 00:34:17
    Index while green technology companies
  • 00:34:19
    have reached historic valuations The
  • 00:34:22
    Fortunes however reversed with the onset
  • 00:34:25
    of the 2022 energy crisis and the return
  • 00:34:28
    of the Primacy of energy security over
  • 00:34:31
    climate
  • 00:34:32
    issues despite the increased interest in
  • 00:34:34
    renewable energy the fossil fuel sector
  • 00:34:37
    accounts for less than 3% of global
  • 00:34:40
    Green Technology Investments which
  • 00:34:42
    totaled 1.8 trillion in 2023 in addition
  • 00:34:47
    despite its technology and capital
  • 00:34:49
    resources the sector has only 2% of
  • 00:34:52
    offshore wind installations only 20% of
  • 00:34:55
    companies in the sector have announced
  • 00:34:57
    climate targets to reduce CO2 emissions
  • 00:35:00
    in other words just as state actors are
  • 00:35:03
    more or less successfully trying to
  • 00:35:05
    diversify their revenue sources the oil
  • 00:35:08
    sector is clinging to its Holy Grail
  • 00:35:11
    nevertheless there is a clear
  • 00:35:12
    transatlantic divide in assessing the
  • 00:35:14
    impact of the green transition and in
  • 00:35:16
    forecasting the future of oil again
  • 00:35:19
    Financial indications seems to best
  • 00:35:21
    reflect this phenomenon only four
  • 00:35:23
    European companies cover 60% of the
  • 00:35:27
    total green investment in the oil sector
  • 00:35:29
    in
  • 00:35:30
    2022 meanwhile the largest US companies
  • 00:35:33
    like their common ancestor Standard Oil
  • 00:35:36
    continue to cling to fossil fuels and
  • 00:35:39
    like Seven Sisters renew their strategy
  • 00:35:42
    of consolidation 2023 is marked by
  • 00:35:45
    historic Acquisitions and the
  • 00:35:47
    consolidation of the dominant positions
  • 00:35:49
    of Chevron and Exxon Mobile Acquisitions
  • 00:35:52
    of smaller oil producers most notably H
  • 00:35:55
    and Pioneer natural resource
  • 00:35:58
    for 53 and $60 billion respectively are
  • 00:36:02
    expected to increase Holdings in Texas
  • 00:36:04
    Shale fields and provide access to new
  • 00:36:07
    Fields off the coast of Guyana as a
  • 00:36:09
    result of the acquisition Exxon has
  • 00:36:11
    become the largest oil producer in the
  • 00:36:13
    US with production of more than 800,000
  • 00:36:16
    barrels per day thus it is not difficult
  • 00:36:20
    to see that the strategy of American
  • 00:36:22
    companies is quite different from the
  • 00:36:24
    actions of European Rivals such as BP
  • 00:36:27
    France's total energies and Norway's
  • 00:36:30
    equinor but investors take the American
  • 00:36:33
    side it is American companies that are
  • 00:36:36
    much more popular on the world's major
  • 00:36:38
    trading floors mainly because of the
  • 00:36:40
    disappointing Returns on green
  • 00:36:42
    Investments and the slowing pace of
  • 00:36:44
    change the main goal of the Americans is
  • 00:36:46
    simply to increase competitiveness in
  • 00:36:48
    the face of increasing competition from
  • 00:36:50
    the Middle Eastern
  • 00:36:52
    exporters European oil Majors on the
  • 00:36:55
    other hand face not only shareholders
  • 00:36:57
    pressure but also tighter regulation at
  • 00:37:00
    the EU and National levels the energy
  • 00:37:03
    crisis and the high cost of renewable
  • 00:37:05
    energy Investments have led both shell
  • 00:37:08
    and BP to reduce and abandon some of
  • 00:37:10
    their climate targets after announcing
  • 00:37:13
    historic results in 2022 due to Rising
  • 00:37:16
    oil prices Shell's CEO said that setting
  • 00:37:19
    Targets in the face of uncertainty
  • 00:37:22
    around the transition could prove
  • 00:37:24
    disastrous it should come as no surprise
  • 00:37:26
    then that shell is major proponent of
  • 00:37:28
    increased L production which is seen as
  • 00:37:31
    a cleaner and more efficient energy
  • 00:37:33
    source its report predicts that demand
  • 00:37:36
    for LNG will grow by up to half by 2040
  • 00:37:40
    while LNG Supply is expected to increase
  • 00:37:43
    by as much as 80% by the end of the
  • 00:37:45
    decade thanks to the new Investments
  • 00:37:48
    particularly in Qatar and the US the
  • 00:37:51
    British like the Americans are also
  • 00:37:53
    considering a merger between shell and
  • 00:37:56
    BP as one of the solutions to maintain
  • 00:37:58
    the market position of the British
  • 00:38:01
    companies The Benchmark for European oil
  • 00:38:03
    and gas companies could be Fran's total
  • 00:38:06
    which is trying to combine the
  • 00:38:07
    exploitation of oil and gas Resources
  • 00:38:10
    with the development of renewable
  • 00:38:12
    energies in recent years the
  • 00:38:14
    conglomerate has allocated up to 30% of
  • 00:38:17
    its budget to Green Investments up to
  • 00:38:20
    three times more than its competitors
  • 00:38:22
    and has achieved returns of 20% today up
  • 00:38:25
    to 90% of total Revenue still comes from
  • 00:38:29
    the sale of fossil fuels although this
  • 00:38:32
    percentage is expected to fall to just
  • 00:38:34
    25% by 2050 a similar strategy has been
  • 00:38:38
    adopted by Norway's equinor which is
  • 00:38:41
    investing in floating Wind forms and
  • 00:38:43
    hydrogen in addition to its goal of
  • 00:38:45
    carbon neutrality by 2050 and a 50%
  • 00:38:48
    reduction in emissions by the end of the
  • 00:38:50
    decade together with shell and total
  • 00:38:53
    equinor is also working on an
  • 00:38:55
    international CO2 capture and storage
  • 00:38:59
    infrastructure but a green transition is
  • 00:39:01
    not just about investing in Technologies
  • 00:39:04
    to harness solar wind or hydroelectric
  • 00:39:07
    power it's also about the elements
  • 00:39:09
    needed to produce all the necessary
  • 00:39:11
    components and that's where big oil has
  • 00:39:14
    another opportunity to find a soft
  • 00:39:16
    Landing many companies already have the
  • 00:39:18
    technology the knoow and the necessary
  • 00:39:21
    capital resources to enter new markets
  • 00:39:24
    lithium in particular deserves special
  • 00:39:27
    attention
  • 00:39:27
    with demand expected to grow by as much
  • 00:39:30
    as 800% by 2050 according to a BP report
  • 00:39:35
    nearly 80% of the raw material is
  • 00:39:37
    expected to be used in battery
  • 00:39:39
    production a key component of the green
  • 00:39:41
    transition in addition the sector has
  • 00:39:44
    the expertise to develop offshore wind
  • 00:39:47
    biofuels hydrogen geothermal energy and
  • 00:39:51
    the still largely uneconomical CO2
  • 00:39:54
    capture and storage however a closer
  • 00:39:56
    look at the plans published so far
  • 00:39:59
    suggest that the sector strategy is more
  • 00:40:01
    akin to hedging than a full commitment
  • 00:40:04
    to a green
  • 00:40:05
    transition to sum up the market
  • 00:40:07
    Champions are not going anywhere private
  • 00:40:10
    oil majors and National oil companies
  • 00:40:13
    will continue to be the basis for the
  • 00:40:15
    functioning of many economies and thus
  • 00:40:17
    for the legitimacy of regimes
  • 00:40:19
    increasingly however they differ in
  • 00:40:21
    their strategies which often mirror the
  • 00:40:24
    policies of the country in which they
  • 00:40:25
    are located in Fe Theory the big oil
  • 00:40:28
    companies have everything they need to
  • 00:40:30
    play a decisive role in the energy
  • 00:40:31
    transition technology Financial capital
  • 00:40:34
    and noow but many of them are
  • 00:40:37
    increasingly hesitant and are going back
  • 00:40:39
    to the matter they know best
  • 00:40:43
    oil the industry's reluctance to embrace
  • 00:40:46
    the energy Revolution is understandable
  • 00:40:49
    but it does not necessarily mean that
  • 00:40:50
    change is reversed or stopped the
  • 00:40:53
    aforementioned author Daniel Jin
  • 00:40:56
    currently an expert at S&P Global
  • 00:40:58
    believes that 25 years is not enough
  • 00:41:01
    time to complete the energy transition
  • 00:41:03
    of the global economy and move away from
  • 00:41:06
    hydrocarbons this important to remember
  • 00:41:08
    that most of the increase in CO2
  • 00:41:10
    emissions in the coming decades will be
  • 00:41:12
    their responsibility of the countries of
  • 00:41:14
    the global South which still suffer from
  • 00:41:17
    energy poverty so while the West will
  • 00:41:19
    gradually move away from oil and is
  • 00:41:22
    already doing so the losses will be
  • 00:41:24
    somewhat offset by the developing world
  • 00:41:27
    in its report BP predicts that the oil
  • 00:41:30
    consumption in Europe will fall to 1960s
  • 00:41:33
    levels as early as 2035 while peak oil
  • 00:41:36
    demand in the west has already passed
  • 00:41:39
    having occurred in the beginning of the
  • 00:41:41
    last decade the situation in Emerging
  • 00:41:43
    Markets is different to illustrate in
  • 00:41:46
    2019 per capita oil consumption in the
  • 00:41:49
    US was 15 times that of India and still
  • 00:41:53
    six times that of China per capita
  • 00:41:56
    energy consumption is a reflection of a
  • 00:41:58
    nation's level of development and has
  • 00:42:00
    always determined the quality of life
  • 00:42:03
    which is well reflected by differences
  • 00:42:04
    in GDP per capita analysts at the OPEC
  • 00:42:08
    cartel estimate that by 2045 o demand in
  • 00:42:12
    non oecd countries that is developed
  • 00:42:14
    countries will increase by 25 million
  • 00:42:17
    barrels per day or nearly 1/4 of current
  • 00:42:21
    demand the BP report indicates that in
  • 00:42:24
    2050 up to 70% of oil supplies could go
  • 00:42:28
    to early stage countries in the next 20
  • 00:42:30
    years China and India are expected to
  • 00:42:32
    account for 60% of the increase in
  • 00:42:35
    demand what's more by the mid 2030s the
  • 00:42:38
    two countries are expected to import 75%
  • 00:42:41
    and 90% of their o demand respectively
  • 00:42:45
    which will exacerbate existing
  • 00:42:47
    dependencies especially in the context
  • 00:42:49
    of supplies from the Middle East
  • 00:42:51
    according to McKenzie and Company by the
  • 00:42:53
    mid 21st century Asia is expected to
  • 00:42:56
    account for to 60% of total crude
  • 00:42:59
    imports which will further increase the
  • 00:43:02
    importance of indopacific sea lines as
  • 00:43:04
    well as bzl necks such as the straight
  • 00:43:07
    of
  • 00:43:08
    malaka nevertheless when talking about
  • 00:43:10
    the geography one should be aware of
  • 00:43:12
    another phenomenon BP Chief Economist
  • 00:43:15
    Spencer Dale among others recalls that
  • 00:43:18
    extraction and production are no longer
  • 00:43:20
    just the stereotypical Petr monarchies
  • 00:43:22
    of the Middle East in the 50 years since
  • 00:43:25
    the oil crisis production in oecd
  • 00:43:27
    countries that is developed countries
  • 00:43:30
    has almost equaled that of OPEC
  • 00:43:32
    approaching 1.5 billion tons per year
  • 00:43:35
    mostly thanks to the United States of
  • 00:43:37
    course but not only Canada produces more
  • 00:43:41
    than Iraq Iran the UAE or Kuwait Norway
  • 00:43:45
    and Mexico produce more than Nigeria
  • 00:43:47
    Libya or Algeria Colombia or the UK are
  • 00:43:50
    also significant producers overall since
  • 00:43:54
    1974 the share of the Middle East in
  • 00:43:56
    global production has fallen from 37% to
  • 00:44:00
    29% in other words competition in the
  • 00:44:03
    market for oil producers is increasing
  • 00:44:06
    and the OPEC cartel's Monopoly is being
  • 00:44:09
    weakened but there is another very
  • 00:44:11
    important green Trend which is also
  • 00:44:14
    playing against oil the electrification
  • 00:44:17
    of cars just as the massive demand for
  • 00:44:19
    automobiles during the first world war
  • 00:44:22
    drove up the demand for oil the massive
  • 00:44:24
    growth of electric cars today could be
  • 00:44:27
    its Guillotine this is for a simple
  • 00:44:30
    reason cars are responsible for more
  • 00:44:32
    than 30% of all oil consumption about 30
  • 00:44:36
    million barrels per day in just 25 years
  • 00:44:40
    according to BP this figure is expected
  • 00:44:42
    to drop to the level of 16 million
  • 00:44:45
    barrels per day if the transition goes
  • 00:44:47
    rather slowly or even 4 million barrels
  • 00:44:50
    per day when it accelerates there is no
  • 00:44:53
    clear Geographic division in this space
  • 00:44:55
    the race to build the the best electric
  • 00:44:58
    car is being attempted by Americans at
  • 00:45:00
    Tesla by Europeans at German or French
  • 00:45:03
    companies or by chines at electric
  • 00:45:06
    Champions like byd or Jil but we are
  • 00:45:09
    still at the beginning of this journey
  • 00:45:11
    with electric cars still accounting for
  • 00:45:13
    only 2% of cars on the roads although
  • 00:45:16
    according to BP EVS are expected to
  • 00:45:19
    account from 20 to 45% of the total Car
  • 00:45:22
    Fleet by 2035 again depending on the
  • 00:45:25
    pace of decarbonization
  • 00:45:28
    in the International Energy agency's
  • 00:45:30
    carbon neutral 2050 scenario 85% of cars
  • 00:45:35
    would have to be electric but this
  • 00:45:37
    currently seems impossible all demand
  • 00:45:39
    would then Fall by as much as 75% in
  • 00:45:42
    20150 and by as much as 25% in 2030
  • 00:45:47
    opec's Secretary General naturally
  • 00:45:49
    criticized the ia's announcement calling
  • 00:45:52
    it a continuation of the anti-fossil
  • 00:45:54
    fuel narrative that could destabilize
  • 00:45:57
    the market the cartel has a completely
  • 00:45:59
    opposite forecast and of course believes
  • 00:46:01
    that oil demand will grow steadily for
  • 00:46:04
    decades to come increasing by as much as
  • 00:46:06
    16% by 2045 pointing to the oecd's
  • 00:46:11
    agency's previous and wrong predictions
  • 00:46:13
    of a global picking oil demand in 2019
  • 00:46:16
    these were debunked after the end of the
  • 00:46:19
    pandemic it should be noted that
  • 00:46:21
    skeptical about the pace of
  • 00:46:22
    decarbonization of Transport is also the
  • 00:46:25
    analysis of Goldman SA tax According to
  • 00:46:28
    which demand will certainly remain above
  • 00:46:31
    100 million barrels per day until 2040
  • 00:46:34
    with a pick in
  • 00:46:35
    2034 at 110 million bars per day the
  • 00:46:40
    bank's analysts believe that most of the
  • 00:46:42
    additional oil on the market will be
  • 00:46:44
    used in the petrochemical industry which
  • 00:46:47
    produces Plastics and fertilizers among
  • 00:46:50
    other products in contrast McKenzie's
  • 00:46:52
    report suggest that demand in the 21st
  • 00:46:54
    century will range from 50 4 million
  • 00:46:57
    barrels per day to as much as 97 million
  • 00:47:01
    regardless the number of electric
  • 00:47:03
    vehicles shall increase from 1.2 billion
  • 00:47:06
    to as many as 2.1 billion new vehicles
  • 00:47:09
    by
  • 00:47:10
    2050 however many argue that the number
  • 00:47:13
    of internal combustion Vehicles will
  • 00:47:15
    also increase due to global population
  • 00:47:18
    growth and economic development in
  • 00:47:20
    poorer
  • 00:47:21
    countries we must also mention the last
  • 00:47:23
    major competitor to black gold an
  • 00:47:26
    element that has been rather dormant
  • 00:47:28
    lately uranium nuclear power was at the
  • 00:47:31
    height of its popularity during the Cold
  • 00:47:34
    War years but charoy and inevitably the
  • 00:47:37
    oil Lobby put the keyush on the nuclear
  • 00:47:40
    excitement today however nuclear power
  • 00:47:43
    is making a comeback in many parts of
  • 00:47:45
    the world with new reactors popping up
  • 00:47:47
    on every continent if this new nuclear
  • 00:47:50
    spurt is successful even more countries
  • 00:47:53
    may follow the nuclear path and then the
  • 00:47:56
    end energy to power electric cars
  • 00:47:59
    alongside volatile Renewables may not
  • 00:48:02
    necessarily come from oil and gas plants
  • 00:48:05
    but from nuclear reactors one example
  • 00:48:08
    comes from France which made a sharp
  • 00:48:10
    nuclear turnaround on the wave of the
  • 00:48:12
    1973 oil crisis based on the so-called
  • 00:48:16
    Mesmer plan France built 60 nuclear
  • 00:48:19
    units in 25 years Rising the share of
  • 00:48:22
    nuclear in the National mix to
  • 00:48:25
    74% and keeping it at a similar level
  • 00:48:27
    for 30 years to this day although the
  • 00:48:30
    initial costs of the nuclear power plant
  • 00:48:32
    are high the construction of a new
  • 00:48:35
    facility in Egypt shows that it doesn't
  • 00:48:37
    have to be reserved only for highly
  • 00:48:39
    developed countries it is estimated that
  • 00:48:42
    nearly 10% of the world's population
  • 00:48:45
    still does not have access to
  • 00:48:46
    electricity paradoxically about 40% of
  • 00:48:49
    the population of Nigeria one of
  • 00:48:51
    Africa's largest oil producers suffers
  • 00:48:54
    from this problem so perhaps the future
  • 00:48:57
    is not oil but
  • 00:49:00
    nuclear the new era of oil is coming and
  • 00:49:03
    it will be much more difficult than the
  • 00:49:05
    last 100 years when Black Gold was
  • 00:49:08
    synonymous with wealth a sophisticated
  • 00:49:11
    geopolitical tool and economic
  • 00:49:13
    development Allin one today oil has many
  • 00:49:17
    rivals the green transition renewable
  • 00:49:19
    energy electrification nuclear power or
  • 00:49:23
    changing social and even ideological
  • 00:49:25
    Trends the new geopolitics of oil will
  • 00:49:28
    be characterized by increased
  • 00:49:29
    competition among energy powers attempts
  • 00:49:32
    to concentrate crude oil production and
  • 00:49:34
    refining and struggles between private
  • 00:49:37
    and public interests over a shrinking
  • 00:49:39
    Market but can we declare the death of
  • 00:49:42
    oil today to answer the question with a
  • 00:49:45
    question can one talk about the oil
  • 00:49:47
    death when the largest power in the
  • 00:49:49
    world is its largest producer and the
  • 00:49:52
    second largest power is its largest
  • 00:49:55
    importer in other words it is far too
  • 00:49:57
    early for that oil will continue to play
  • 00:50:00
    a key role in the coming decades but a
  • 00:50:03
    relatively smaller one compared to the
  • 00:50:06
    Past decades while its biggest
  • 00:50:08
    beneficiaries will try to delay its
  • 00:50:10
    final Twilight as long as possible
Tags
  • Oil
  • Energy transition
  • Fossil fuels
  • Renewable energy
  • Geopolitics
  • OPEC
  • Climate change
  • Saudi Arabia
  • Shale Revolution
  • Electric vehicles