At the 22nd World Petroleum Congress in Istanbul, Turkey, oil & gas industry stares at a dark future. And the reason is not just low price of crude oil, which is currently trading at nearly $45 a barrel, less than a third of the price 10 years ago—$145 in 2008. A grim portend of the dark future became visible just a week before the meet when Volvo announced it would phase out production of petrol-only cars from 2019 in favour of electric cars. Speaking at the Congress, Amin Nasser, the head of Saudi Aramco, said that oil and gas would remain central to the world’s supply of energy for decades to come. He believed there was a widespread agreement that even as the world moved to greater use of renewables over fossil fuels, petroleum would continue to be the heart of the energy mix. But experts have started sounding the death-knell for the oil industry.
Stanford economist Tony Seba, known as an energy futurist, says electric vehicles would devastate the global oil industry by 2030. Seba predicts a catastrophe for the oil industry. According to Seba, the rise of self-drive cars would bring down oil demand sharply which could reduce the price of oil to $25 a barrel within 10 years. Seba predicts that 95% of people won’t own private cars by 2030 which would wipe off the automobile industry. This could destroy the global oil industry. Ben Van Beurden, CEO of Royal Dutch Shell Plc, is not going to wait that long. In his speech at the World Petroleum Congress on Monday, he said his company would spend $1 billion a year on its ‘New Energies’ division due to the world transitioning fast towards renewable power and electric cars. He said in some parts of the world electric cars had gained consumer acceptance while wind and solar costs were falling fast.
In a short time, the buzz in the transport industry has advanced from electric vehicles to autonomous or self-driving vehicles. During the same time, transport industry was disrupted by innovative internet-driven solutions such as Uber and rideshare apps. More elecrtic automobiles and demand for fewer cars will hit the oil industry badly. The dim future of oil will also have a major geopolitical impact: the economies that depend mostly on oil will be hit badly. Many Arab countries will lose much of their influence and power.