Oil & Gas

Global stability partly hangs on Saudi reinvention

25 May 2022

The kingdom’s efforts to shape its image go so far as branding a café at Davos bearing the crown prince’s name. Worldwide demand for oil and gas amid the Ukraine war gives Saudi extra power and a chance to realign itself politically. There’s much more work to do.

Russia fossil fuel embargo has an inexorable logic

25 May 2022

Western allies are discussing buyer-imposed caps or tariffs to shrink Russia’s oil and gas revenues. But the measures would keep money flowing to Moscow, and could trigger the abrupt end of Russian imports they are meant to delay. Better to jump straight to an embargo now.

China sits in Russia oil sanction sweet spot

19 May 2022

Moscow’s cheap crude, spurned by the West, is heading to Asia. Yet the increase in China is less than in India, and European states like Italy are still snapping it up. That reduces the scope for Beijing to suffer blowback, and raises the chance that it will buy more.

EU funds can ease, not end common energy pain

18 May 2022

Brussels has earmarked 300 bln euros to cut fossil fuel ties with Russia. Rising rates make cheap, repurposed Covid-rescue loans more attractive to many EU states, increasing the chance they’ll be used. But higher fuel purchases will still have to come from national budgets.

Aramco is the old new Apple

11 May 2022

The Saudi oil company has overtaken the tech giant as the world’s largest by market capitalization, knocking smartphone maker Apple down the charts. But judging by fellow oil majors, Aramco’s value probably isn’t much different than a decade ago – it’s just more visible.

BlackRock spikes guns of green activists

10 May 2022

Larry Fink’s group will back more oil and gas production. After COP26, institutional money looked set to phase out fossil fuels, but an energy crisis has intervened. Rivals may follow the $10 trln fund giant, propping up driller valuations and complicating the green transition.

Europe may swap one energy dependency for another

9 May 2022

The bloc is ramping up investment in renewable sources to help kick its addiction to Russian oil and gas. Yet China currently controls at least 75% of the solar panel supply chain. To gain its energy freedom, Europe will also need to invest in manufacturing at home.

Europe’s oil major discount grows ever more stark

5 May 2022

Exxon Mobil and Chevron trade at big premiums to Shell, BP and Total, despite all benefitting from soaring fossil fuel prices. The Americans’ slower pivot to renewable energy is one reason why. Europeans’ lucrative trading arms give cause for investors to be more generous.

HSBC breakup, Big Oil’s surprise restraint

5 May 2022

The $129 bln bank is under pressure from its largest shareholder to spin off its Asian unit. In this Viewsroom podcast, Breakingviews columnists discuss why the plan deserves short shrift. Also, the decision by oil giants to limit production will win few friends.

EU’s oil embargo is slave to volatile crude price

4 May 2022

The bloc wants to stop buying Russian exports within six months. That looks too slow to properly choke off funding for President Vladimir Putin’s war machine. Yet going any faster could make crude prices spike, exacerbating Europe’s battle against inflation.

Capital Calls: Airbnb

3 May 2022

Concise views on global finance: The $97 bln vacation-booking platform’s post-pandemic bounceback has beat expectations. It helps that CEO Brian Chesky quickly adapted the business, including cutting costs.

Russia plays the fool in its own default theatre

3 May 2022

Moscow looks set to meet foreign currency bond payments, after saying a month ago it could only pay in roubles. High oil and gas prices mean it has ample revenue to meet its obligations. But the debt grandstanding may not yet be over, notably if the EU imposes an energy embargo.

Breakup opposition will smoke out AGL’s C-suite

3 May 2022

A lacklustre plan to split coal power from the retail business is sputtering after Atlassian co-CEO Mike Cannon-Brookes grabbed an 11% stake and vowed to vote no. It leaves boss Graeme Hunt and his team vulnerable. Their exit would open the door to a fresh takeover approach.

Big Oil snubs commodity shortages

29 Apr 2022

Neither Exxon nor Chevron posted big increases to production last quarter despite surges to commodity prices caused by the conflict in Ukraine. Their decision is rational based on future prices and investor pressure. But it won’t make them friends in the court of public opinion.

Africa is imperfect solution to Europe’s gas woes

28 Apr 2022

The continent’s vast reserves and growing liquefied gas supplies can cut some of the bloc’s energy dependence on Russia. Yet lack of infrastructure, domestic needs and rigid contracts limit Africa’s ability to boost exports quickly. Political instability is a further headache.

China’s overseas oil giant preps for inward turn

21 Apr 2022

CNOOC, booted off New York, popped the maximum 44% on its Shanghai debut. It was well-timed, with sanctions on Russia boosting the fossil fuel’s price. Diplomatic tensions make its foreign business risker, and it may ditch some assets. But there’s plenty to do closer to home.

Oil-field services miss brief chance to make hay

20 Apr 2022

Baker Hughes’ first-quarter earnings disappointed due to cost pressures and a fading Russian business. Growing demand for liquefied natural gas might benefit the company and its peers. But the reasons that business will thrive are the same ones that are reducing the appeal of fossil fuels.

India’s Russian oil binge carries hidden costs

14 Apr 2022

New Delhi is filling its boots with Moscow’s cheap crude, just as Europe and traders like Vitol start to turn away. The aggressive ramp-up carries longer-term risks. As a keen buyer, India will find it hard to get waivers from sanctions if the West targets Russia’s energy trade.

Covid shuts down China, Baltic lessons for Germany

14 Apr 2022

As Shanghai grapples with a coronavirus outbreak and almost one-third of the country’s population is under lockdown, Breakingviews columnists discuss the impact on China’s economy in this Viewsroom podcast. Plus, tiny Lithuania shows European countries how to give up Russian gas.

Putin’s finances can survive a European energy ban

8 Apr 2022

The Russian president may cut off gas to Europe, or even face a hydrocarbon export freeze himself. That could mean up to $50 bln less annual revenue, yet Moscow’s reserves and high oil prices will cushion the blow. An embargo would hurt Russia, but not bring Putin to his knees.