Oil Dividends, Geopolitics and Gender

Key takeaways:

– Aramco’s increase in dividend payout to the Saudi Government despite lower oil prices than 2022 may have surprised many, however, since the state owns more than 90% of the company’s shares, it is just money going from one pocket to another in the oil dependent economy.

–  Aramco abandoned its plan to expand its oil capacity (13 million barrels per day by 2027). The decision frees additional capital, enabling the company to support alternative projects and contribute funds towards the realization of the Saudi government’s economic objectives.

– OPEC+ has effectively maintained a price floor of approximately $80 per barrel through output reductions. Given the absence of fundamental shifts in market conditions regarding both supply and demand, there appears to be no imperative for OPEC+ to alter its current policy.

– The Gulf Cooperation Council (GCC) economies are largely oil dependent. Therefore, it makes sense for these economies to recycle their oil revenues to expand their non-oil sectors including renewable energy. That by large gives them an advantage in the race towards a netzero economy compared to capital-constraint economies.

– To date, energy markets haven’t panicked due to the attacks in the Red Sea as there has not been any losses in actual supplies, but a re-routing of cargoes.

– The global economy is currently better equipped to deal with an energy crisis compared to previous episodes given the greater diversification of sources of energy, energy efficiency improvements and limited potential for a strong increase in energy demand.

– The industry continues to be male dominated. When we see many more women in leadership positions, we can then say that the change is truly happening.