Home Will an ongoing price war bring us one step closer to the nationalisation 3.0 of Big Oil?

GEAB 144

The monthly bulletin of LEAP (European Laboratory of Political Anticipation) - 15 Apr 2020

Will an ongoing price war bring us one step closer to the nationalisation 3.0 of Big Oil?

Is the US oil industry undergoing a significant shift in its relationship with its government, now accepting levels of influence or direct control that would have been unthinkable only a few months ago?  Are the large oil companies, and the supply of energy they oversee, now so important to national security that they must be protected and regulated like the big banks after the last financial crisis? These are questions that will have profound implications for the petroleum industry around the world, and also the price that we will all end up paying for the petrol in our tanks. As we start to flatten the curve of COVID-19 cases, our attention is turning to the widening financial implications of this worldwide pandemic and the lasting effect it will have on our economies and communities.

The COVID-19 Pandemic gives birth to an old Crisis

In recent weeks we have seen ‘once in a lifetime’ events becoming almost commonplace, and no less so in the oil markets. A distinct drop-off in prices began with the arrival of COVID-19 in early January, then accelerated as the world went into lockdown and everyone suddenly realised that we would not be burning so much of the ‘black gold’ for a considerable time. The initial failure of OPEC to agree to production cuts,[1] and the subsequent oil price war between Russia and Saudi Arabia[2] led to all oil prices, including the West Texas Intermediate benchmark (WTI), falling even more dramatically after 8th March. Many in the media soon concluded that this was a direct attack on US shale oil production,[3] an industry which had been growing quickly, supported by President Trump, and which had boosted US output to become the largest oil producing nation in 2018 (See figure 1).

Comments

To leave a comment sign up now
Contents

Political anticipation is LEAP’s method of “rationalisation of the future”. In fact, it is very close to the “historical method” in the sense that it is accessible to all and [...]

Since 2008, the GEAB has been talking about the ‘world after’. Now everyone is using this expression. It is therefore time to archive the ‘global systemic crisis of 2008-2020’. The [...]

 “In 2020, a global pandemic called COVID-19 brought the world economy to a virtual standstill for several months. To contain the epidemic, governments had to take radical measures to contain [...]

Many people will see their dreams of radical change disappointed. Yet there will certainly be change! You don't need to be an eminent guru to understand that the 8 trillion [...]

While the need for the digitalisation of the international monetary system described earlier is being reinforced by the financial crisis triggered by the pandemic, one finds in many articles on [...]

For the past few weeks, the planet has been in a state of emergency; people are locked into their homes and the economy is in a state of hibernation. As [...]

Businesses - Don't expect a normal recovery in September! A growing proportion of economic and service players are aware of this, but it is worth hammering home the fact that [...]

Related articles
GEAB
15 Mar 2021

Investments, trends and recommendations (Mar 2021)

#bitcoin #commodities #finance #gold #investments #oil

A short guide for investors in times of reflation/inflation  In the current context of extreme uncertainty, we have put together a series of 8 recommendations and practical tips to get [...]

GEAB
15 Mar 2021

Silver Update – Crucial battle over price discovery in the second half of 2021

#commodities #finance #silver

After years of depressed prices as a result of short selling and the distraction of cryptocurrencies, the silver price is currently showing improved strength – even while it continues to [...]

GEAB
15 Feb 2021

Investments, trends and recommendations (Febr 2021)

#bitcoin #Crypto #finance #investments #oil

- > Currencies: Landslide - > Oil: Fire-exposed - > Raw materials: Heavy stuff - > Big Tech: Turnaround in sight - > Pharma: Run away - > Beijing Olympic [...]