The first of three Oil Review reports from the recent Platts fifth Annual Crude Oil Markets Conference and Forum in London
Long before globalisation became a buzzword, the effect of the oil price on events — and of events on the price of oil — had global influence and global significance, writes Vaughan O’Grady
And that significance is still evident today in a world where communications mean information exchange is faster and more influential than ever before.
It was a point a variety of speakers brought forcefully home to attendees of the Platts fifth Annual Crude Oil Markets Conference and Forum, which was held recently in London.
The event, organised by leading global energy information provider and publisher of benchmark price references, Platts, was sub-headed Exploring Regulatory Change, Benchmark Evolution, and Shifting Fundamentals.
However, the topics discussed were often more appropriate to mainstream news headlines than esoteric oil terminology: the Japanese nuclear disaster, China’s one-child policy, Greece’s economic crisis and the possibility of military action against Iran were all part of the discussion alongside tight oil, overdevelopment of refineries and fuel efficiency.
And yet all these factors will affect the price and production of oil in the years to come: the Fukushima disaster has increased Japanese reliance on LNG and oil; Chinese development — and hence its reliance in oil – may eventually stall as its population ages; Greece leaving the euro could affect the rest of Europe, bringing another recession and diminished oil demand; and if Iran closes the Straits of Hormuz the effect on oil transportation could be catastrophic.
Nor is that all. If the US shale oil and gas bonanza is even greater than first suspected, what will that mean for US refineries and imports?
As its population continues to expand, how will Saudi Arabia’s exports be affected by growing local demand? Will fuel efficiency radically diminish oil use?
Speakers tried to address all these topics and more.
The upshot was a fascinating snapshot of oil trends in the second decade of the new millennium and a valiant attempt by some of the oil industry’s best minds to summarise their meaning and, even more bravely, to assess what long-term trends we might expect.
The following two reports will highlight just a few of the topics covered at the event.
Not many directly referenced our main markets, Africa and the Middle East. However, as was made clear a number of times, nothing that happens to oil in one part of the world can be entirely irrelevant to another.
That is the nature of this most global – and globally significant – of industries.
Vaughan O’Grady
