GEAB 136

We are now well into the fifth – and probably last – wave of the oil era. All the conditions needed for us to leave behind our oil dependency are now in place: an anticipation of the exhaustibility of the resource, an awareness of environmental issues, the presence of new economic players sufficiently independent of existing oil lobbies to initiate change (namely China), the industrial production of alternative solutions (electric vehicles), etc … The setbacks General Electric has experienced following its bet on fossil fuels testify to the effectiveness of the energy transition agenda embodied by the Paris Agreements.[1]

All that remains now is to limit the damage inflicted by the transition out of this core sector of the previous global economic system. The present price volatility is showing how difficult it is for the oil sector to maintain high prices: despite US sanctions against the biggest producers (Iran, Venezuela), despite OPEC’s attempts to boost prices via output cuts[2] and despite the closure of the industry’s American shale drilling sites,[3] it may only take a war in the Middle-East to bring prices above $70-80 per barrel (and probably not for long, knowing all the opt-out solutions available to the global economy).

In fact, the most influential producing countries are currently striving to delay their own economic hard landing by redirecting it towards others in general and towards their enemies in particular. Cuts in market share are being imposed on Iran and Venezuela in order to buy more time for Saudi Arabia and the United States.