The sun sets behind an idle pump. In 2020, the coronavirus pandemic created winners and losers in the business world. The oil industry was pummeled in 2020 after travel was halted in efforts to contain the coronavirus, sending demand for jet fuel and gasoline plummeting. AP
The sun sets behind an idle pump. In 2020, the coronavirus pandemic created winners and losers in the business world. The oil industry was pummeled in 2020 after travel was halted in efforts to contain the coronavirus, sending demand for jet fuel and gasoline plummeting. AP
The sun sets behind an idle pump. In 2020, the coronavirus pandemic created winners and losers in the business world. The oil industry was pummeled in 2020 after travel was halted in efforts to contain the coronavirus, sending demand for jet fuel and gasoline plummeting. AP
The sun sets behind an idle pump. In 2020, the coronavirus pandemic created winners and losers in the business world. The oil industry was pummeled in 2020 after travel was halted in efforts to contai

With worst of 2020 over, resilience and flexibility can help energy industry face surprises


Robin Mills
  • English
  • Arabic

"It is not given to human beings - happily for them, for otherwise life would be intolerable - to foresee or to predict to any large extent the unfolding course of events." 2020 aptly reminded us of Winston Churchill’s dictum.

It is always tempting to think of current times as uniquely troublesome, unprecedented and portentous. Mr Churchill’s long career included a global pandemic, the influenza of 1918, which struck his prime minister, David Lloyd George, and even more severely, US president Woodrow Wilson, during the crucial Versailles peace conference. He also served through two World Wars, the Russian Revolution, a global depression, the first atomic bombs, the creation of the Iron Curtain, and the effective end of the British empire.

Another very human tendency is to fight the last war. Patchy immunisation take-up, difficult logistics, and the rise of more transmissible or vaccine-resistant strains may mean the victory over the virus is not as swift and complete as we had hoped. Yet we can hope that the pandemic begins to ebb next year.

The threat du jour over the last two decades has moved from terrorism to financial crises to populist demagogues to pandemics and now, perhaps, a West-China confrontation. All of these dangers remain, but we need to refocus on new concerns. There were plenty of warnings and harbingers of the 9/11 attacks, the global financial crisis, Covid-19, that were ignored by those whose decisions could have made a difference.

Climate change is an ever-intensifying, slowly-unfolding catastrophe that underpins many other troubles. But a new emergency may suddenly erupt in 2021: a major earthquake or volcano, a serious international war, a crippling cyber-attack, or something entirely novel.

The world energy system cannot be prepared for every contingency, but it coped remarkably well with this year’s challenges. It is easier to manage glut than shortage. Notwithstanding, there were no major disruptions to fuel and electricity supplies, no serious panics or massively counterproductive decisions, and energy prices mostly stayed within normal ranges. The exception, the brief dip in US oil prices below zero on April 20, was an anomaly, quickly remedied.

Production cuts of unprecedented depth by the Opec+ alliance were, of course, crucial in restoring oil prices to moderate $40-50 per barrel levels, at which most major oil companies and exporting countries can survive, if not prosper. The 9.7 million barrels per day initial cut has been aided by the drop in US output because of the impact of low oil prices, taking off another 1 million bpd.

The gas industry has no such coordinated stabilisation mechanism, and it entered 2020 already in a state of oversupply. Yet gas demand suffered much less than oil from the seizure of global mobility. Prices were very low in summer, when the new American liquefied natural gas (LNG) facilities showed the value of their flexibility in cutting back output.

Since then, prices have bounced back because of cold weather, shipping bottlenecks, and some technical problems at export projects. In a rare reversal, LNG prices to Asia for delivery in January and February have risen above the energy-equivalent value of oil.

Though it is a dirty dinosaur fuel, prices for coal have risen at the end of this year because of strong Asian demand, an unofficial Chinese ban on importing Australian coal over a diplomatic spat, and growing challenges to supply because of unwillingness to invest in mining.

Metals have also performed well, as pandemic-era demand shifts perhaps temporarily from travel and services to manufactured goods, and China responds to economic trouble with yet another infrastructure-heavy stimulus. Copper, used in electrical wiring, has been especially strong, hitting a seven-year high. Lithium is one exception despite its critical role in batteries, slumping to a third of 2018 prices on oversupply from new mines.

The various commodities seem set for further divergence next year. Oil, the most globalised energy source, is also the one most vulnerable to a sudden halt in globalisation.

We may be weary of teleworking, Zoom schooling, webinars and staycations, but some part of commuting and business travel is likely gone forever. Even though BP’s projection that the all-time peak of oil consumption may have been last year appears premature, perhaps as much as 3 million bpd of demand has been permanently lost.

However, oil’s fate in 2021 depends very much on Opec+’s strategy and coherence. Russia has signalled a desire to recover market share while keeping prices around $40 to $50 per barrel. That is probably the best way to limit competition while keeping wavering members on board. This can be the first stage of transition to a new long-term strategy for the big crude exporters. Underinvestment in new fields elsewhere may bring another market upturn, even against a backdrop of ultimate decline. Yet Iran, Iraq, Libya and Venezuela remain wildcards.

The long-term prospects for gas are debatable, but if prices remain reasonably low, there is still the chance to gain alongside renewable energy in pushing out coal.

Green stimulus plans and targets for carbon-neutrality look good for demand for renewable energy systems, electric vehicles, and the materials that make them. Key battery and electrical metals such as copper, silver, lithium and nickel should all be in strong demand. Idiosyncratic factors such as mine closures, export bans and trade disputes can crimp supply, and may come to be reported as breathlessly as Opec deliberations.

The long-term trends should be clear, some briefly interrupted by the pandemic, others accelerated. The unfolding course of 2021 will have its surprises. But it will not be intolerable for the energy industry and its customers if, once again, they show resilience and flexibility in the face of pandemonium.

Robin M. Mills is CEO of Qamar Energy, and author of The Myth of the Oil Crisis

UAE currency: the story behind the money in your pockets
The specs

Engine: 2.9-litre, V6 twin-turbo

Transmission: seven-speed PDK dual clutch automatic

Power: 375bhp

Torque: 520Nm

Price: Dh332,800

On sale: now

About Housecall

Date started: July 2020

Founders: Omar and Humaid Alzaabi

Based: Abu Dhabi

Sector: HealthTech

# of staff: 10

Funding to date: Self-funded

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%3Cp%3E%3Cstrong%3EDeveloper%3A%3C%2Fstrong%3E%20SCE%20Studio%20Cambridge%3Cbr%3E%3Cstrong%3EPublisher%3A%3C%2Fstrong%3E%20Sony%20Computer%20Entertainment%3Cbr%3E%3Cstrong%3EConsole%3A%3C%2Fstrong%3E%20PlayStation%2C%20PlayStation%204%20and%205%3Cbr%3E%3Cstrong%3ERating%3A%3C%2Fstrong%3E%203.5%2F5%3C%2Fp%3E%0A
Find the right policy for you

Don’t wait until the week you fly to sign up for insurance – get it when you book your trip. Insurance covers you for cancellation and anything else that can go wrong before you leave.

Some insurers, such as World Nomads, allow you to book once you are travelling – but, as Mr Mohammed found out, pre-existing medical conditions are not covered.

Check your credit card before booking insurance to see if you have any travel insurance as a benefit – most UAE banks, such as Emirates NBD, First Abu Dhabi Bank and Abu Dhabi Islamic Bank, have cards that throw in insurance as part of their package. But read the fine print – they may only cover emergencies while you’re travelling, not cancellation before a trip.

Pre-existing medical conditions such as a heart condition, diabetes, epilepsy and even asthma may not be included as standard. Again, check the terms, exclusions and limitations of any insurance carefully.

If you want trip cancellation or curtailment, baggage loss or delay covered, you may need a higher-grade plan, says Ambareen Musa of Souqalmal.com. Decide how much coverage you need for emergency medical expenses or personal liability. Premium insurance packages give up to $1 million (Dh3.7m) in each category, Ms Musa adds.

Don’t wait for days to call your insurer if you need to make a claim. You may be required to notify them within 72 hours. Gather together all receipts, emails and reports to prove that you paid for something, that you didn’t use it and that you did not get reimbursed.

Finally, consider optional extras you may need, says Sarah Pickford of Travel Counsellors, such as a winter sports holiday. Also ensure all individuals can travel independently on that cover, she adds. And remember: “Cheap isn’t necessarily best.”

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UAE currency: the story behind the money in your pockets
Scoreline

UAE 2-1 Saudi Arabia

UAE Mabkhout 21’, Khalil 59’

Saudi Al Abed (pen) 20’

Man of the match Ahmed Khalil (UAE)

COMPANY PROFILE
Name: Airev
Started: September 2023
Founder: Muhammad Khalid
Based: Abu Dhabi
Sector: Generative AI
Initial investment: Undisclosed
Investment stage: Series A
Investors: Core42
Current number of staff: 47
 
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%3Cp%3EThe%20%3Cem%3ESafer%3C%2Fem%3E%20has%20been%20moored%20off%20the%20Yemeni%20coast%20of%20Ras%20Issa%20since%201988.%3Cbr%3EThe%20Houthis%20have%20been%20blockading%20UN%20efforts%20to%20inspect%20and%20maintain%20the%20vessel%20since%202015%2C%20when%20the%20war%20between%20the%20group%20and%20the%20Yemen%20government%2C%20backed%20by%20the%20Saudi-led%20coalition%20began.%3Cbr%3ESince%20then%2C%20a%20handful%20of%20people%20acting%20as%20a%20%3Ca%20href%3D%22https%3A%2F%2Fwww.google.ae%2Furl%3Fsa%3Dt%26rct%3Dj%26q%3D%26esrc%3Ds%26source%3Dweb%26cd%3D%26ved%3D2ahUKEwiw2OfUuKr4AhVBuKQKHTTzB7cQFnoECB4QAQ%26url%3Dhttps%253A%252F%252Fwww.thenationalnews.com%252Fworld%252Fmena%252Fyemen-s-floating-bomb-tanker-millions-kept-safe-by-skeleton-crew-1.1104713%26usg%3DAOvVaw0t9FPiRsx7zK7aEYgc65Ad%22%20target%3D%22_self%22%3Eskeleton%20crew%3C%2Fa%3E%2C%20have%20performed%20rudimentary%20maintenance%20work%20to%20keep%20the%20%3Cem%3ESafer%3C%2Fem%3E%20intact.%3Cbr%3EThe%20%3Cem%3ESafer%3C%2Fem%3E%20is%20connected%20to%20a%20pipeline%20from%20the%20oil-rich%20city%20of%20Marib%2C%20and%20was%20once%20a%20hub%20for%20the%20storage%20and%20export%20of%20crude%20oil.%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3EThe%20%3Cem%3ESafer%3C%2Fem%3E%E2%80%99s%20environmental%20and%20humanitarian%20impact%20may%20extend%20well%20beyond%20Yemen%2C%20experts%20believe%2C%20into%20the%20surrounding%20waters%20of%20Saudi%20Arabia%2C%20Djibouti%20and%20Eritrea%2C%20impacting%20marine-life%20and%20vital%20infrastructure%20like%20desalination%20plans%20and%20fishing%20ports.%C2%A0%3C%2Fp%3E%0A
Greatest Royal Rumble match listing

50-man Royal Rumble - names entered so far include Braun Strowman, Daniel Bryan, Kurt Angle, Big Show, Kane, Chris Jericho, The New Day and Elias

Universal Championship Brock Lesnar (champion) v Roman Reigns in a steel cage match

WWE World Heavyweight ChampionshipAJ Styles (champion) v Shinsuke Nakamura

Intercontinental Championship Seth Rollins (champion) v The Miz v Finn Balor v Samoa Joe

United States Championship Jeff Hardy (champion) v Jinder Mahal

SmackDown Tag Team Championship The Bludgeon Brothers (champions) v The Usos

Raw Tag Team Championship (currently vacant) Cesaro and Sheamus v Matt Hardy and Bray Wyatt

Casket match The Undertaker v Rusev

Singles match John Cena v Triple H

Cruiserweight Championship Cedric Alexander v Kalisto

Sole survivors
  • Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
  • George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
  • Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
  • Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.