Economic Expansion

Renewable and nuclear energy – the two largest sources of non-emitting technologies – do not need to be mutually exclusive if forward-thinking countries and companies can develop suitable complementary advanced energy management techniques.  New hybrid energy solutions could play to the strengths of the respective technologies while acknowledging the shifting dynamics of electricity markets that are adjusting to the realities of an increase in intermittent generation models.  And with developing countries frequently having more flexibility to design their grid structures (in comparison to pre-existing limitations in many first-world countries), the opportunities may exist to demonstrate these advances in emerging economies.  

2020 will enter history books as the year of the COVID-19 pandemic which has inflicted the biggest damage on both the global economy and the global oil market since the Great Depression of 1929.

It will change the way we live in more ways than one. If anything, the pandemic has proven irrevocably how inseparable oil and the global economy are by demonstrating that destroying one automatically destroys the other and vice versa. 1

In the family apartment in my hometown les Ulis (south suburb 20 miles away from Paris, France), I vividly remember spending the first few weeks of the month of May 2003 preparing from my master's oral exam for the ESCP Business School ....

In March 2020, for geopolitical reasons, Russia refused to go on with Saudi Arabia to adjust, along the rule of what is known as the OPEC+ deal, their oil extractions to world demand.  It was normal, because there were alerting signs that oil demand might drop due to the coronavirus in China. Moscow refused Ryad’s request to adhere to the production cutbacks in order to support the price. Saudi Arabia, stung to the core, reacted in the opposite way and declared its intention to increase its crude production to more than 10 million barrels per day in April, once the OPEC+ deal will expire at the end of March. In addition, it has announced reducing the price by $6 to $8 a barrel for all its crude to all destinations.  The consequence was not long in coming: the price of crude fell to around $32 a barrel. Oil futures suffered their biggest daily loss since 1991 during the Gulf War.

This geopolitical skirmish happens at the wrong moment. The Coronavirus epidemic was killing much more in Europe and USA than in China (officially!). Drastic measures taken everywhere to try to limit the pandemic had radical consequences on economy. In the face of the sharp drop in economic activity, demand for oil is in freefall. It is self-evident: airplanes that don't fly, cars that stay in the garage, deserted restaurants, closed cinema and stadiums, cancelled vacations cause the consumption of petroleum products to plummet. When disruptions occur in a huge market, speculators are quick to try to take advantage of the instability.