This week the UK’s conservative Daily Telegraph newspaper published an interesting perspective from their world economy editor.
“Saudi and OPEC officials self-evidently do not believe their own claim that world oil demand will keep growing briskly for another generation as if electric vehicles had never been invented, and there was no such thing as the Paris Accord.”
OPEC had to slash output last October in order to shore up prices. It had to cut again in April. The Saudis then stunned traders with a unilateral cut of one million barrels a day (b/d) in June. All told, the OPEC-Russia cartel has had to take 2m b/d of production off the table at a high point in the economic cycle, after China’s post-Covid reopening and at a time when the US economy has been running hot with a fiscal expansion roughly equal to Roosevelt’s world war budget.
That 2m b/d figure happens to be more or less the amount of crude currently being displaced by EV sales worldwide, according to Bloomberg New Energy Finance.
Yet the mood was all defiance and plucky insouciance at the 24th World Petroleum Congress in Calgary this month… This skips over the awkward detail that EVs are already on track to reach 60pc of total car sales in the world’s biggest car market within two years (not a misprint). The cartel is being hit from two sides. Petrol and diesel cars are becoming more efficient, gradually displacing 1.4bn vintage models disappearing into the scrap yard. BP says…
