Catastrophic energy outlook… Can supply meet the demand?

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Is there ample oil available?

UNDOUBTEDLY, it is a worrying time for global energy consumers due to the limited availability of oil and gas. Should Europe go ahead with its intention to boycott and stop buying Russian oil and gas by the end of the year? OPEC+ does not want to openly and honestly admit that they do not have any additional barrels of oil supply, despite the monthly assurance of more additional “paper” barrels to the global market through the simple written or printed statements that were announced globally.

Perhaps, Saudi Arabia and the Emirates can provide additional supply, but not much as it will not be more than 1.5 million barrels. The burden on the oil consumers is huge, with the current oil price of $115, which may increase. This is making the market jittery and nervous and without any direction and indication. Also, the consumers of Russian oil continue to enjoy some extra discount of $35 in today’s tight market.

The US shale producers, and despite their huge profits and cash flow, are still refusing to venture and seek more shale drilling. They are continuing with the conservative ploughing of cash returns, ignoring supply tightness. They are putting the blame solely on OPEC+ and nobody else.

The same applies to the international oil companies with their shareholders refusing to invest more in conventional oils and pushing for green energy. The current US administration is responsible for the current mess and the lack of investments by freighting investors and keenness to switch to green energy. At the same time, it refused to reduce the level of usage of coal, which is the biggest enemy of the environment and a major contributor to its destruction.

Now, it is asking oil companies to go back to their traditional fossil fuels, as it led the world into an energy crisis. After all of the generating of cash and making profits, energy crisis, shortages, higher costs, expensive energy cost, it is not taking any responsibility. It has fallen squarely on the consumer governments, which must manage.

Oil companies are meeting the shareholders’ conditions and expectations. Short term expectations are not encouraging. The world can expect some turbulence and energy crisis to happen soon, if we do not find a replacement for Russian oil!

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

This news has been read 12228 times!