Oil Demand and Acquisitions: A Clash of Forecasts

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Oil,Demand,Acquisitions

Exxon and Chevron's recent acquisitions spark debate on the future of oil demand, with the International Energy Agency and OPEC offering conflicting forecasts.

Around the time when Exxon announced the acquisition of Pioneer Natural Resources, the International Energy Agency published its much-awaited World Energy Outlook. It contained no surprises a month earlier, its head, Fatih Birol, had said the IEA expected oil, gas, and coal demand to peak before 2030. With that, he prompted a quick and negative response from

, which said the IEA had basically become part of the political establishment rather than a forecaster and an advisor. A few days later, Chevron did what some analysts said it would do catch up with Exxon with the planned acquisition of Hess. Talk began of more megadeals. said the deals prove oil demand is resilient. The IEA told investors not to bank on that. The future outlook for oil became a lot more uncertain. Or did it Following the announcement of the Chevron-Hess tie-up, Saudi Arabia's energy minister Abdulaziz bin Salman slammed the IEA indirectly by saying at a conference in Riyadh that 'Exxon, Chevron didn't buy because they want to have stranded assets.

, Exxon, and Chevron have a vested interest in making us all believe the world will need more oil in the future. But does China Or India Rather, they do not. What they do have a vested interest in is making life relatively better for greater portions of their massive populations. Based on data about oil consumption in both countries, this undertaking requires growing rather than declining rates of oil demand—even with wind, solar, and EVs, where, again, China is the biggest world market.

have a vested interest in the world continuing to use oil and gas for as long as possible. Yet their bigger interest is in making themselves alive for as long as possible—even if that requires a move away from oil. This is what European Big Oil did they invested billions in a pivot away from oil and gas and towards wind, solar, EV charging, and hydrogen.

 

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