There is a certain bloodless attitude that is required to stay current with the thrust and parry of events in the world that oil and gas producers have wrought.
This week, the events leading up to and now trailing away from the attack on Saudi Arabia’s oilfields have implications not only for a reported 5 percent of the world’s oil supply, but also the direction of climate change policy.
The upshot for the climate: the control of large segments of the world’s oil supply by cash-strapped, politically fragile and increasingly desperate regimes represents a risk to collective action on climate change that is distinctly different from that posed by large, private oil and gas interests beholden to shareholders.
There are three immediate takeaways from last week’s events and the market reaction:
- Current markets are oversupplied and likely to remain so for the foreseeable future. This depresses revenues and heightens pressure within governments and oil companies.
- For now, the flow of oil and cash to governments is more important to political leaders than the flow of blood that often punctuates conflicts over energy.
- Oil producers will not combat climate change. The events showcased the heightened need for collective action. But any consensus among oil producers to participate meaningfully in climate action is weak, at best.
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Press release: IEEFA update: Aftermath of Saudi oilfield bombings sound warnings for future volatility