– As the energy transition accelerates, the oil market will start to shrink. In a shrinking market, the lowest-cost producer is the last to leave the market. Middle East oil producers have a clear advantage over their peers elsewhere as they are the low cost producers.
– Following the shale revolution, the oil trade relationship between the US and the Middle East changed drastically with wider implications particularly on geopolitics. Before the revolution, the US was an important market for Middle Easter oil. After the revolution, it has become a competitor.
– Middle East oil exporters have been expanding their oil trade with Asia, not only by selling more barrels but also through direct investments such as in Asian oil refineries, which will lock the seller and the buyer in a long term relationship.
– The longevity of oil-reliant Middle Eastern regimes depends on whether these governments have been smart enough to sustainably recycle oil revenues and invest a good proportion of those revenues in sovereign wealth. Another important dimension is whether those countries have invested enough to strengthen their institutions.
“Asia’s energy market: The new global epicenter“, Dr Carole Nakhle, Dec 2023
“A rising China is reshaping global energy markets“, Dr Carole Nakhle, Nov 2023
“Oil markets, OPEC+ and COP28“, Dr Carole Nakhle, Dec 2023
“The world is still reliant on fossil fuels“, Dr Carole Nakhle, Sep 2023
“Africa’s energy resources: a blessing or a curse?“, Dr Carole Nakhle, Aug 2023