Wednesday, 22 June 2016

Oil and the global economy

If you are an observer of oil and the global economy, you will by now have learned that oil and money, like fame is fickle. Why? one might ask -well it's because of the renewable energy market completely taking over and dominating the economy a little at a time. Oil companies are closing in bulk and the global economy is feeling it. Crude oil and natural Gas is no longer the determining factor for wealth of an economy, and things are about to heat up even more. 

If an oil company is looking to survive, they had better open a green division. This time around millennials are running the show and things are changing for the healthier. Let's take a look at the energy giant "Shell", they not so recently opened a green division and will be benefiting loads from it as this is what is currently in demand. We mean let's face it, oil will never lose it's overall appeal across the board entirely, however, it will become less of a staple and more of a not so necessary option, especially in first world countries. 

So, what does that mean for third world countries like Trinidad and Tobago and Venezuela, that are heavily dependent on oil revenue to survive- it means they will have to find other means of sustaining their economies. Joining the renewable energy bandwagon will not be enough for those economies. In the mean time parts of the world that were heavy investors in the natural resource will more or less be enjoying not having yet another big bill at the end of "whenever they get around to paying their bills"...Russia is taking the biggest hit of all the world, as they rely heavily on the export of oil to sustain the demands of it's economy. Adaptation to the change in pace is necessary in order to prevent it's economy from shrinking into a wasteland.

Our humble predictions are that it might be a down season for oil now and in the future for a while, but we foresee the demand for oil coming full circle and the needs for it will arise again. Sustainable energy has it's market and will continue to, but the dust will settle.

In the mean time oil companies should consider downsizing and embracing the tide as it passes, join the renewable energy train and reap the benefits until it's your time to shine again.