The whole world is behind OIL!! 🛢️
Are we on the verge of extinction of oil or the oil companies are playing the supply and demand game? 💭
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Today's reading is going to be humorous.
The world is in high demand for oil and natural gas, the western countries have to survive the winters, the developing nations have to run their economy, and the weaker nations have to feed their people. The world is seeing an oil shortage, but to our surprise, currently, there are enough oil and natural gas reserves to fulfill the world's demand.
Then what's the problem?
The Top Players 🕵️♂️
The top oil and natural gas-producing nations are the United States, Saudi Arabia, Russia, Canada, Iraq, and China. The United States and China consume more than their production. Saudi Arabia majorly exports oil to China, India, and UAE. Canada sends all of its oil to the United States (still there is scarcity). Russia use to take care of all the European nations. But NO RUSSIAN OIL now.
Russia is ready to ship its oil. Still, everyone is hesitating to buy from it.
For a small or weak nation, the biggest threat to importing Russian oil is the sanctions from western countries. The country's economy is in the hands of the west- their trade (which is done in U.S dollars), military support, political stability, and whatnot. The West believes in Either you are with us or against us ideology.
Every country’s dependency on the United States is very high.
Imagine in India if from tomorrow Mastercard, Visa, Google, and Microsoft stopped working. What will you do?
Will you blame Modi Ji for it?
Oh, wait he has already asked us to be AtmaNirbhar.
Why the oil companies are not digging deeper?
Simple Maths, The current oil demand is very high, and the companies are charging very high rates for the oil, now if they go deeper and produce more oil, the overall supply will increase and prices of oil will become less. Hence fewer profits for the company.
The top oil and petroleum-producing countries (OPEC countries) have decided to cut their oil production by 2 million barrels per day to increase oil prices globally.
The world needs Russian Oil.
Meanwhile, India is playing its diplomacy, India is importing oil from Russia at a cheaper price. The United States is threatening sanctions on India to which India replies as "If you can provide us the oil at the same rates, we will buy from you". (Mic drop moment)
Hypocrisy and Blunders
In 2021 when Mr. Biden was contesting for elections, he promised that if he wins the term, he will certainly stop companies to go deeper into producing oils and will prohibit them on public properties.
Climate change was real back in 2021.
Fast forward to 2022, and Mr. Biden is begging the companies to go deeper into producing oils. The oil extracting companies in the U.S.A have kept the supply constant (to maximize the profits), which means to fulfill its demands, the U.S.A will have to import oil from other nations.
Hahaha, wait the fun part is-
The other European nations were backing on the U.S.A to fulfill their oil demands and they all imposed heavy sanctions on Russian oil companies (cause why not).
In 2021, 40 percent of the European Union's gas imports came from Russia. Today Russian gas accounts for less than 10% of the European Union's gas supply.
The EU will have to look upon all the sanctions that they have imposed on Russia and will have to reconsider them (which the U.S.A will surely not like). The situation in Europe is worse and they will have to find a quick and cheaper solution.
Thank You
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Ciao
Nishchal from Team Rubric
Very informative and good read, as always.