Oil cos must invest more or $100 pb level ‘within reach’

This news has been read 13150 times!

Curtailing supply will not be solution

THERE is not much of a choice left … Either the oil companies must invest more in oil or the price will reach the 2014-level, according to top oil trading companies. Meanwhile, oil companies are investing less in hydrocarbons and more into going green. Therefore it is a hard choice, e s p e c i a l l y with the public pressure and the courts that are ready to pass judgements. This is the current oil situation. The oil price is on the rise, and the demand is recouping, while OPEC-Plus still has five million barrels of spare capacity in hand to be released. Oil market is definitely encouraged by the rise in the oil demand, and the return of normal life in the USA, China and Europe, while waiting on India to see how it progresses in its fight against COVID-19 and its various mutations.

Kamel Al-Harami

This is in addition to the opening of countries to travel and receiving of visitors and tourists, pushing the demand for aviation fuel to pick up again. Even though it might take some time, everyone seems ready to go back to their normal lives. Some companies’ executives have started asking their employees to come back to work in their offices. Certainly, pressure will pile upon OPEC-Plus in case oil price reaches $80 per barrel. It is keeping more than five million barrels in hand to ensure smoothness or to keep the market thirsty and awaiting firmer prices at OPECPlus’ leisure.

The choice is difficult and the challenge is great in terms of switching to green options, renewable sources and cleaner air gradually away from oil within maybe the next 30 years. This represents a sort of nightmare for major oil companies in terms of either reducing or switching away from oil or keeping pace with oil. Meanwhile, the national oil companies will perhaps continue to invest in producing oil and gas without paying much attention yet. Certainly, oil is cheaper to invest, as about $2 trillion is needed to invest in green energy to make available 200,000 barrels of oil per day.

Other oil producers do not see it coming and perhaps it is their “wishful thinking” that it will take 20 years from now. Going green is expensive, but oil consuming governments will push towards increasing the tariffs on oil to get the necessary funds to support green energy policy. International oil companies will split their capital between oil and gas, and renewable energies by perhaps 50 percent. At present, there is no escape from higher oil prices and how far it will reach … It could be anybody’s guess. However, curtailing supply will not be the solution for firmer oil prices.

By Kamel Al-Harami Independent Oil Analyst
email: [email protected]

This news has been read 13150 times!

Related Articles

Back to top button

Advt Blocker Detected

Kindly disable the Ad blocker

Verified by MonsterInsights