For a resource hidden in the depths, oil had never been so often associated in the press with the adjective “abyssal”. Hard to believe, seeing oil prices record another rise on Tuesday February 9, that BP, lhe British oil and gas giant recorded a net loss of over $ 20 billion in 2020. The American ExxonMobil has also just suffered the heaviest annual loss in its history: around 22.4 billion dollars. As oil companies take stock of a year at the bottom of the hole, one after another, the recent rise in the price of a barrel cannot hide the reality: nothing is working in the ruthless world of black gold.
Pulverized by the global recession linked to the Covid-19 pandemic, demand for oil plunged, dragging the price of a barrel of crude with it. Noting in particular its incompatibility with the objectives of combating climate change set by the Paris agreement, investors are deserting the fossil fuel sector, which is mainly responsible for greenhouse gases. To top it off, Joe Biden, the newly elected president of the United States, put a halt to the Keystone XL pipeline project, while in Europe, the production of electricity from renewable energies exceeded for the first time production from fossil energies, according to a report published on January 25 by a German think tank *. Should we see in these tremors the beginning of the end of oil supremacy?
Teleworking, suspended aviation sector, factories idling, consumption at half mast … In 2020, global oil consumption fell by around 9%. “Never seen, notes Olivier Lejeune, analyst at the International Energy Agency. Except for the years 2008 and 2009, marked by the financial crisis, the demand for oil has increased continuously since the 1940s. Until 2019, it still increased each year by 1 or 2%, driven by the needs of emerging countries. “
Thus, the pandemic marks more a parenthesis than a break in this trend: “Everything suggests that the economy will resume its course in the second half of 2021. Of course, there are many unknowns, but provided the vaccines are effective and the Covid recedes, aviation will resume, l The economy will turn around again and, mechanically, the demand for oil will increase, at least initially “, continues Olivier Lejeune, sweeping aside the hypothesis of abandoning oil in the short term, despite the efforts shown to decarbonize energy.
“We must be careful not to extrapolate the year 2020, which is an absolutely exceptional year in the strongest sense of the term”, confirms Francis Perrin, energy specialist at the Institute of International and Strategic Relations (Iris). Observers even anticipate a return to 2019 levels from 2022, pushing back the energy revolution to “medium and long term”. “The end of oil is not yet here, even if its relative decline is already underway, he continues. Oil remains the number one energy source, even if it is starting to lose market share due to the ambition of many countries to reduce the share of fossil fuels in their energy mix. “
“The reality is that oil is today the only essential energy in the world. We do not know how to replace it massively and quickly in road, air and maritime transport as well as in petrochemicals.”
Francis Perrin, energy specialistto franceinfo
If the automotive sector has been marked in recent years by the spectacular growth of electric vehicles in developed countries, “the renewal of the park should take at least 10 to 20 years”, continues Olivier Lejeune. And anyway, the colossal energy needs of developing countries ensure that oil will retain its title as the world’s leading energy source for years to come.
However, it seems that oil is no longer popular, including among oil groups. BP wants to multiply its investments in low-carbon energies by 10 times by 2030, to reach $ 5 billion per year. ExxonMobil has created a business center dedicated to less polluting energies, while the French Total is increasing acquisitions in renewable energy. “This is not the case everywhere, but, at least among the major European oil companies, there is a real industrial strategy to diversify their activities and their portfolio., assures Francis Perrin. In the years to come, the world will consume more and more electricity and, for the oil groups, there is no question of leaving this market to electricians alone. “
In 2020, investments in oil and gas collapsed by 34%, reaching their lowest level since 2004, according to a recent report by the International Energy Forum, cited by Bloomberg*. In the United States, the leading oil producer and spearhead in the exploitation of shale oil, Joe Biden’s environmental gentleman, John Kerry, himself mentioned* the urgency of“invest in clean energies, jobs and technologies, rather than being prisoners of the past”.
“The risk is that the tankers get out of oil … before the consumers”, pointe Matthieu Auzanneau, director of The Shift Project, a think tank that explores the issue of reduction of the economy’s dependence on fossil fuels. Him apprehend a “tightening of the oil supply due to the lack of sufficient industrial projects to offset the decline in production in the North Sea, in Africa, and in old producing countries”.
An observation shared by Olivier Lejeune, for whom “the current drop in investments could translate into a drop in supply within four or five years”.
For two or three years, it has become more and more complicated to finance oil wells. It has to be extremely profitable because investors have more and more doubts about this sector.
Olivier Lejeune, analyst at the International Energy Agencyto franceinfo
But, here again, this apparent disenchantment does not augur an exit from oil in the coming years, agree the experts solicited by franceinfo. Olivier Lejeune believes that the reserves exploited by the Gulf countries will prevent any shortage in the short term. “They want to go to the end of their resources. If everyone gives up oil, these countries will be the last to leave”, he sums up, adding that, while European companies are diversifying by investing in carbon-free energies, “it is the oil money that allows them to invest, and they intend to exploit the existing wells to the maximum.” “To think that the oil companies are going to throw oil and gas in the trash overnight in order to make only renewable sources, is to take your desires for realities”, Francis Perrin slice. Because this The expected switch to cleaner energies will not be enough to meet demand, he believes: “Not by 2025. It’s too short.”
In these conditions, what does the immediate future hold? ? Due to sustained demand, the price of a barrel will inevitably rise with the return of economic activity. “I don’t think we can go right back to the price of 100 dollars per barrel “, nuance however Olivier Lejeune. “If demand falls, prices will not increase, but if investments stop completely in the sector, we are not immune to a price shock in a few years”, continues the analyst, quick to recall that it is impossible to accurately predict the price of oil.
For Matthieu Auzanneau, the price of a barrel is not really the subject: we should above all anticipate the price to pay if we do not prepare today for a controlled and organized exit from hydrocarbons. Because if the question of the depletion of the resource divides the observers of the sector, assures him that “For several years now, tankers have not found conventional oil. Production in Russia and production in the former USSR will decline. However, Russia accounts for 30% of EU supplies, and The former Soviet bloc is over 40%. Algeria has been in decline since 2007, Nigeria is in decline, Angola is in decline. More than half of current EU supplies are pledged to the decline by 2030. ” The threat already has its scenario: “Mad Max”, summarizes the expert.
“This crisis that we are going through is a good opportunity to take stock of the extent of our omnipresent dependence on oil”, he suggests, advocating “a systematic detoxification” and “the reorganization of transport, industry, agriculture, in a more sober way”.
“If we don’t take oil out of our own accord to save us from climate chaos, we will be overtaken by the decline of the resource. And, just like the climate crisis, peak oil is no longer in the distant future.”
Matthieu Auzanneau, from The Shift Projectto franceinfo
“The commitments to exit from oil that have been made are not backed up by reorganizations of activities that would make it possible to get there effectively, at the right pace, he still laments. So far, no country has a coherent plan to implement the end of oil. This is the tragedy. “
* Links followed by an asterisk are in English.
