Thread by @ieefa_institute

Global oil majors are back in the black—but for how long?

Something is different about this #oilprice spike. Instead of rushing to drill, oil companies are cutting their capex, reducing debt and paying more to shareholders.

What’s going on here? 🧵

Former sources of value have become vehicles for destroying value. Investors—and, we suspect, even company management—understand that more drilling and expensive acquisitions are a bad bet.

High oil prices mean renewable energy, EVs and the variety of industrial moves to decarbonize are incentivized. Even volatility, the short-term problem caused by rising prices, is sufficient to drive calls for more rapid adoption of alternative fuels. ieefa.org/ieefa-u-s-pric…

Competition, geopolitical complexity & climate concerns cloud prospects for the industry, even as prices rise. Over $39T in assets have been committed to fossil fuel divestment & action from activist shareholders is rocking boardrooms. via @MatthewPhillips nytimes.com/2021/06/09/bus…

Fossil fuel companies will be around for a long time. They face an #energytransition and that they can join—or they can lose value by keeping their fortunes tied to business practices that drive volatility and rising prices.

For the oil industry, making a comeback and coming back all the way are two very different scenarios.

More here: lnkd.in/gBcmn4zE

#oott #energytransition

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