DOCSLIB.ORG

The Links Between the Price of Oil and the Value of US Dollar

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
The Links Between the Price of Oil and the Value of US Dollar International Journal of Energy Economics and Policy Vol. 3, No. 4, 2013, pp.341-351 ISSN: 2146-4553 www.econjournals.com The Links between the Price of Oil and the Value of US Dollar Yi Zhang Suffolk University, Boston, USA. Email: [email protected] ABSTRACT: Using monthly data, this paper studies the cointegration between the real price of oil and the real effective exchange rate of US dollar allowing for structural breaks. Contrary to the conclusion from previous literature, this paper finds that the cointegration between the oil price and the value of US dollar does not significantly exist unless the effects of two structural breaks in the past, November 1986 and February 2005, are controlled for. Keywords: Oil price; Exchange rate; Cointegration JEL Classifications: C32; F31; Q43 1. Introduction The US dollar is typically used as the invoicing currency in international crude oil trading. Therefore, the dollar crude oil price is believed to be influenced by fluctuations in the value of US dollar. At least since 2002, the dollar price of oil has tended to rise at the same time that the US dollar has depreciated, in terms of real effective exchange rate (hereinafter referred to as the ‘US dollar exchange rate’). This raises the possibility that co-movements between the price of oil and the US dollar exchange rate exist in the long run, and a depreciation of the US dollar should be associated with a rise in the dollar price of oil. Depreciation of dollar makes oil relatively cheaper in countries with appreciating currencies such as the euro and yen (Alhajji 2004). If the US dollar exchange rate really matters in setting the price of oil, it is appropriate to raise the question of the choice of currency for oil invoicing. Therefore, it is interesting and important to investigate the linkage between the dollar oil price and the US dollar exchange rate. With a longer and more up-to-date data, I do not find a long- run relationship between the price of oil and US dollar exchange rate, which is also found by Ferraro et al. (2011), and Chen et al. (2013). However, in this paper, I show that the long-run relationship significantly exists with the consideration of two breakpoints. One is in November 1986, when the oil pricing system changed from the refinery margin netback to formula netback pricing. The other one is in February 2005, when the world oil demand increased, particularly coming from the emerging economies. A lot of papers have studied the long-run relationship between the price of oil and the US dollar exchange rate, and most of them only find causality moving from the price of oil to the exchange rate, not vice versa, which is not consistent with the analysis mentioned above. Some have studied the theory underlying the links between the price of oil and the US dollar exchange rate. For the effect of the oil price on the dollar exchange rate, Krugman (1983) and Golub (1983) explain such effects through the balance of payments. They both argue that a rise in the oil price will bring a wealth transfer from oil-importing countries to oil-exporting countries, and its impact on the exchange rate will depend on the portfolio preferences of oil-exporting countries in the short run, but will depend on their import preferences in the long run. They find that oil-exporting countries, typically OPEC countries, have a preference for US dollar-denominated assets. When the oil price rises, it increases the income of oil-exporting countries. Then, in the short run, these countries use the higher income to purchase more US dollar-denominated assets, which causes the US dollar to appreciate. In the long run, higher income will transfer into higher expenditure. For example, suppose these countries use the higher income to purchase European goods. Then they have to exchange US dollars for Euros, which eventually leads to a depreciation of the US dollar. 341 International Journal of Energy Economics and Policy, Vol. 3, No. 4, 2013, pp.341-351 The effect of the dollar exchange rate on the price of oil can be found in Haughton (1989) and Alhajji (2004). An exogenous exchange rate change will bring about an oil price adjustment separately on the oil demand and oil supply sides. On the demand side, once the dollar depreciates, oil in other countries is cheaper in local currencies, which means a higher quantity demanded for oil, and hence a higher world demand for oil. Then the oil price rises. On the supply side, the oil exporting countries lose purchasing power when the dollar depreciates, and in order to defend losing purchasing power, they may curtail supply, which will increase the oil price. Other researchers have used econometric techniques to investigate the link between the price of oil and the US dollar exchange rate. Some of them just focus on the bilateral linkage between these two by employing cointegration tests and error correction models to explore the long-term relationship, and the direction of causality between them over time. They all find that these two series are cointegrated, and the oil price causes subsequent changes in the US dollar exchange rate (Amano and Norden, 1998a; Amano and Norden, 1998b; Benassy-Quere et al., 2007; Chaudhuri and Daniel, 1997). Chen and Chen (2006) use panel data covering G7 countries from 1972 to 2005 to explore the relationship between the real oil prices and the real exchange rate. Using a panel cointegration test and panel prediction regression, they show that the real oil price may have been the dominant source of real exchange rate movements during this period. Olomola and Adejumo (2006) investigate the relationship between the real oil prices and real exchange rate by including other important macroeconomic variables such as output, inflation, and the money supply, especially in Nigeria, in a cointegrated Vector Autoregressive (VAR) model. They examine the effect of an oil price shock on Nigeria’s currency against the US dollar exchange rate, output, inflation and the money supply. They find that an oil price shock does have a significant effect on the exchange rate as well as the money supply in the long run, but not on the output and inflation in Nigeria. Lizardo and Mollick (2010) use the same method to explore the oil price-exchange rate relationship. They consider the US dollar exchange rate against the currencies of oil-importing countries and oil- exporting countries, respectively; they also add the US relative money supply and relative industrial production into their cointegrated VAR model. They find that increases in real oil prices lead to a significant depreciation of the USD against net oil exporter currencies, such as Canada, Mexico, and Russia, but an appreciation against oil importers, such as Japan. Huang and Guo (2007) construct a structural VAR model to study the effects of oil price shocks, demand shocks, supply shocks and monetary shocks on China’s real exchange rate. They find that real oil price shocks would lead to a minor appreciation of the long-term real exchange rate due to China's lesser dependence on imported oil than its trading partners included in the RMB basket peg regime and rigorous government energy regulations. Narayan et al. (2008) use daily data on oil prices and the Fiji-US dollar exchange rate for the period 2000-2006, to study the links between the volatility of oil prices and the volatility of the Fiji-US dollar exchange rate, employing a GARCH model. They find that a rise in the oil price leads to an appreciation of the Fijian dollar vis-à-vis the US dollar. Most of the above literature also investigates the direction of causality between the price of oil and the US dollar exchange rate. All the above-mentioned empirical studies only find an effect of the price of oil on the exchange rate, but not vice versa, which is not consistent with the analytical consensus. Still, there is some research focusing on the effect of the exchange rate on the price of oil. Novotny (2012) investigates the effect of nominal effective exchange rate of the US dollar on the Brent oil price, by including the US dollar industrial production, short-term real interest rates, oil inventories and rate of use of oil refineries in the USA in the model. The findings provide evidence of an inverse relationship between the US dollar exchange rate and the Brent crude oil price, which may be due to the additional speculative demand for oil as an alternative investment instrument. Using cointegration tests and error correction models, Sadorsky (2000) investigates the relationships among futures prices for crude oil, heating oil, and unleaded gasoline, and the US dollar exchange rate. The results show a long-run equilibrium relationship between these four variables, and the causality is from exchange rate to those energy futures prices. Zhang et al. (2008) investigate the volatility spillover effect of the US exchange rate on the price of oil, using cointegration and ARCH-type models as well as the methodology of Granger causality in 342 The Links between the Price of Oil and the Value of US Dollar risk that is employed by Hong (2002) for risk effects. They mainly find that US dollar depreciation is a key factor in driving up the international crude oil price. In summary, most previous papers find a cointegrated long-term relationship between the price of oil and the US dollar exchange rate, with the causality running mostly from the price of oil to the exchange rate. In this paper, I pay attention mainly to the price of oil as a dependent variable, and study further the interaction between the spot price of oil and the US dollar exchange rate in the long term by employing a cointegration test and error-correction model, with consideration for possible structural breaks.
Load more

Recommended publications
  • Since the Last Issue of Musings from the Oil Patch on January 19, 2005
    MUSINGS FROM THE OIL PATCH October 24, 2017 Allen Brooks Managing Director Note: Musings from the Oil Patch reflects an eclectic collection of stories and analyses dealing with issues and developments within the energy industry that I feel have potentially significant implications for executives operating and planning for the future. The newsletter is published every two weeks, but periodically events and travel may alter that schedule. As always, I welcome your comments and observations. Allen Brooks Energy Transitions: Issues, Questions And Some Answers The last Musings began with an article titled “Understanding The Energy Transition In Transportation.” It’s not as if we haven’t written extensively about electric vehicles (EV) versus internal combustion vehicles (ICE), because we have. But that is only one aspect of the broader subject of energy transitions. The subject of energy transitions is important, but confusing, so we decided to devote this entire Musings to the topic. Our goal is to The subject of energy transitions frame the issues and their significance. To do that we have to delve is important, but confusing into what the issues mean, along with discussing proposed solutions and their impact on our economy and society. Hopefully, we can provide answers and bring insights to the debate. As a disclaimer, Musings we understand that is a newsletter and not a book – so we need to stay at a high level of discussion. That may disappoint some readers, but the magnitude of the topic means we can’t dig deeply into each sub-issue. We will identify subjects for deeper analyses.
    [Show full text]
  • International Deals | PLS
    August 30, 2016 • Volume 08, No. 13 INTERNATIONALDEALS Serving the marketplace with news, analysis and business opportunities Siccar Point buys into Mariner heavy oil project off UK Bashneft sale shelved after Two years after private equity firms Blackstone Energy Partners and Blue Water Lukoil balks, Rosneft wants in Energy teamed up to form North Sea-focused Siccar Point Energy, the E&P firm has Russia indefinitely tabled the finally announced its first acquisition. It is buying 8.9% WI in the Greater Mariner area of auction of its 50.08% stake in mid-sized the UK North Sea from Japan’s JX Nippon, which will retain 20% WI. Statoil operates oil producer Bashneft after expected with 65.1% WI and Dutch non-op Dyas owns the remaining 6%. The area’s US$7.7 bidder Lukoil got cold feet billion Mariner heavy oil development is underway with first oil expected in 2H18. and officials debated whether Siccar Point launched to allow a sale to No. 1 First deal for startup with $500MM in August 2014 with producer Rosneft. The Bashneft sale Blackstone, Blue Water & GIC backing. initial funding of $500 was proposed early this year as a major million from Blackstone, Blue Water and Singaporean sovereign wealth fund GIC. part of Russia’s deficit reduction plan Its strategy focuses on acquiring undercapitalized fields and developments on the UK Continental Shelf as established producers like Total and Shell reduce their footprints. Russia had planned to auction off its The company is led by CEO Jonathan Roger, who was COO of North Sea producer controlling stake as early as September.
    [Show full text]
  • Black Gold." Fuel: an Ecocritical History
    Scott, Heidi C. M. "Black Gold." Fuel: An Ecocritical History. London: Bloomsbury Academic, 2018. 177–222. Environmental Cultures. Bloomsbury Collections. Web. 1 Oct. 2021. <http:// dx.doi.org/10.5040/9781350054011.ch-006>. Downloaded from Bloomsbury Collections, www.bloomsburycollections.com, 1 October 2021, 05:08 UTC. Copyright © Heidi C. M. Scott 2018. You may share this work for non-commercial purposes only, provided you give attribution to the copyright holder and the publisher, and provide a link to the Creative Commons licence. 6 Black Gold I Oil ontology Oil pulses through the carburetors of the industrial world. It is the fossil fuel of modern motion. Once oil became widely and cheaply available sometime between the twentieth century’s world wars, various grades of diesel and gasoline drove engineering innovation toward the automobile. Old coal drove the locomotives and steamships of nineteenth- century moving industry; now, diesel and heavy fuel oil do that work. As a symbol of freedom, power, and recklessness, the automobile has left its tire tracks on many a literary page. We’ll kick those tires and take them for a spin in this chapter. Fossil oil is not only a fuel of motion; its carbon chains appear in a mind- boggling array of materials. Anything not explicitly metal or glass oft en has some petroleum component, usually one of the ubiquitous plastics of modern life. Its usefulness is not just convenient, it is equally terrifying. Th e architecture of late- capitalist consumerism would collapse without load- bearing oil. No computers or television without oil: no Amazon.com, Facebook, OK Cupid, or Candy Crush.
    [Show full text]
  • The Political Economy of Oil and Natural Resources Instructor
    Course Title: The Political Economy of Oil and Natural Resources Instructor: Yahya Sadowski. Number of credits: 2. Teaching Format: 2-3 introductory lectures followed by 9 seminar discussions. Semester: Winter 2015. Class Times: Mondays, 9:00AM to 10:40 AM at Costa Coffee or equivalent. Office Hours: 11:00-12:00 AM Mondays…or by appointment. Course Status: Elective. Course Summary A common—but controversial—idea in global policy debates is that the production of natural resources is associated with a whole host of political problems. These resources are supposed to be sources of domestic and international exploitation, civil and inter-state violence, corruption and crime, pollution and authoritarianism. There are now international public policy processes that focus upon these issues as they relate to water, wheat, bananas, coffee, timber, opium, copper, uranium, rare earths, etc. In this course we will examine each of these debates, focusing the elaborate literature that has developed from analysis of the largest commodities—by value and volume—in world trade: the hydrocarbons crude oil and natural gas. Learning Objectives The first third of the course will supply students with an overview of the hydrocarbons industry, including some of the technological and economic particulars that set it apart from the production of other commodities. In the second third of the class, attention will shift to the role that hydrocarbons play in the political and economic development of individual countries. In the final third of the class, the subject will be geopolitics, and how hydrocarbons produce conflict or cooperation at the international level. This course will not frame the controversies surrounding oil and gas in the conventional manner as matters of energy policy.
    [Show full text]
  • The Case Against U.S. Crude Oil Exports Researched and Written by Lorne Stockman
    October 2013 The Case againsT U.s. CrUde Oil expOrTs Researched and written by Lorne Stockman. With thanks to Paulina Essunger and David Turnbull for comments. Design: [email protected] Cover photo: iStock ©Ngataringa Published by Oil Change International 714 G Street SE, Suite 202 Washington, DC 20003 [email protected] www.priceofoil.org © All rights reserved October 2013 Contents executive summary 4 Crude Oil Exports Will Undercut Climate Goals 4 Report Outline 4 1. Boom! 6 Tight Oil Fever: Can the Hyperbole be Believed? 9 2. Mismatch: Why U.s. Refineries are Awash in tight oil 11 Tight Oil’s Inconvenient Geography 11 Tight Oil’s Inconvenient Chemistry 13 Product Yields: Why Tight Oil is Too Light for Some U.S. Refining Markets 13 Bad Timing: Light Oil Growth in a Heavy Oil Market 14 3. Unburnable Carbon: Why U.s. Crude exports Will Undermine Climate Goals 16 4. Current Crude export Regulations 20 5. Crude oil exports Past and Present 22 Current Export Licenses 23 Foreign Crude Exports: A Route Out of North America for the Tar Sands 25 6. Boom or Bust! Increasing Calls for U.s. Crude oil exports May Be Gaining traction 26 Industry’s Dissenting Voices 29 7. Will the tight oil Refining Wall ever Really Hit? 31 The Growing North American Market for Tight Oil 31 Refinery Modifications: Increasing U.S. Capacity to Refine Light Oil 31 Splitters: One Answer to the Condensate Problem 32 Exploiting Loopholes 33 8. Conclusion 34 Figure 1. Bakken Tight Oil Fracking Schematic 6 Figure 2. Tight Oil Production, 2000 to 2012 7 Figure 3.
    [Show full text]
  • Market Power, Production (Mis)Allocation and OPEC∗
    Market Power, Production (Mis)Allocation and OPEC∗ John Asker Allan Collard-Wexler Jan De Loecker UCLA Duke University KU Leuven and Princeton University NBER NBER NBER and CEPR October 18, 2017 Abstract This paper estimates the extent to which market power is a source of production misal­ location. Productive inefficiency occurs through more production being allocated to higher- cost units of production, and less production to lower-cost production units, conditional on a fixed aggregate quantity. We rely on rich micro-data covering the global market for crude oil, from 1970 to 2014, to quantify the extent of productive misallocation attributable to mar­ ket power exerted by the OPEC. We find substantial productive inefficiency attributable to market power, ranging from 14.1 percent to 21.9 percent of the total productive inefficiency, or 105 to 163 billion USD. Key words: Market Power, Productive Inefficiency, Misallocation, Cartels, Oil, OPEC. JEL Code: D2, L1, L4, L72 ∗We would like to thank Russell Cooper, Martin Hackmann, Volker Nocke, Michael Whinston, Rob Porter, and Jo Van Biesebroeck, and participants in various seminars and conferences for their comments. Excellent research assis­ tance was provided for by El Hadi Caoui, Ardis Zhong, Sherry Wu and Yilin Jiang. Financial Assistance from Prince­ ton University’s Industrial Organization Group, NSF (SPS #220783) and FWO Odysseus Grant is greatly appreci­ ated. Contact information: [email protected], [email protected] and [email protected]. 1 1 Introduction Market Power and Aggregate Welfare In this paper we re-evaluate the following statement of Harberger describing the state-of­ affairs in ?When we are interested in the big picture of our manufacturing economy, we need not apologize for treating it as competitive, for in fact it is awfully close to being so.
    [Show full text]
  • UC Irvine Electronic Theses and Dissertations
    UC Irvine UC Irvine Electronic Theses and Dissertations Title The Petrodollar Era and Relations between the United States and the Middle East and North Africa, 1969-1980 Permalink https://escholarship.org/uc/item/9m52q2hk Author Wight, David M. Publication Date 2014 Peer reviewed|Thesis/dissertation eScholarship.org Powered by the California Digital Library University of California UNIVERISITY OF CALIFORNIA, IRVINE The Petrodollar Era and Relations between the United States and the Middle East and North Africa, 1969-1980 DISSERTATION submitted in partial satisfaction of the requirements for the degree of DOCTOR OF PHILOSOPHY in History by David M. Wight Dissertation Committee: Professor Emily S. Rosenberg, chair Professor Mark LeVine Associate Professor Salim Yaqub 2014 © 2014 David M. Wight DEDICATION To Michelle ii TABLE OF CONTENTS Page LIST OF FIGURES iv LIST OF TABLES v ACKNOWLEDGMENTS vi CURRICULUM VITAE vii ABSTRACT OF THE DISSERTATION x INTRODUCTION 1 CHAPTER 1: The Road to the Oil Shock 14 CHAPTER 2: Structuring Petrodollar Flows 78 CHAPTER 3: Visions of Petrodollar Promise and Peril 127 CHAPTER 4: The Triangle to the Nile 189 CHAPTER 5: The Carter Administration and the Petrodollar-Arms Complex 231 CONCLUSION 277 BIBLIOGRAPHY 287 iii LIST OF FIGURES Page Figure 1.1 Sectors of the MENA as Percentage of World GNI, 1970-1977 19 Figure 1.2 Selected Countries as Percentage of World GNI, 1970-1977 20 Figure 1.3 Current Account Balances of the Non-Communist World, 1970-1977 22 Figure 1.4 Value of US Exports to the MENA, 1946-1977 24 Figure 5.1 US Military Sales Agreements per Fiscal Year, 1970-1980 255 iv LIST OF TABLES Page Table 2.1 Net Change in Deployment of OPEC’s Capital Surplus, 1974-1976 120 Table 5.1 US Military Sales Agreements per Fiscal Year, 1970-1980 256 v ACKNOWLEDGMENTS It is a cliché that one accumulates countless debts while writing a monograph, but in researching and writing this dissertation I have come to learn the depth of the truth of this statement.
    [Show full text]
  • Bibliography
    Bibliography Abalofia, M., & Biggart, N. (1992). Competitive systems: A sociological view. In P. Ekins & M. Max-Neef (Eds.), Real-life economics. London: Routledge. Abel, T., & Stepp, J. R. (2003). A new ecosystems ecology for anthropology. Conservation Ecology, 7(3), 12. Abel, N., et al. (2006). Collapse and reorganization in social-ecological systems: Questions, some ideas, and policy implications. Ecology and Society, 11(1), 17. Ad-Hoc Working Group. (2010). Critical raw materials for the EU. Brussels: European Commission. Adamides, E. D., & Mouzakitis, Y. (2008). Industrial ecosystems as technological niches. Journal of Cleaner Production, 17, 172–180. Adamson, K. -A. (2009). Small stationary survey. Fuel Cell Today. Adamson, K.-A., & Callaghan, L. (2009). 2009 Niche Transport Survey.www.fuelcelltoday.com Adriaanse, A., et al. (1997). Resource flows. The material basis of industrial economies. Washington, DC: World Resource Institute. Agre, P., et al. (2011). The Stockholm memorandum. 3rd Nobel Laureate symposium on global sustainability, Stockholm. Aguilera Klink, F. (1992). Sobre la irrelevancia conceptual de la economía ambiental. Barcelona: III Jornadas de Economía Crítica. Aleklett, K. (2010). Peak coal in China. www.energybulletin.net/print/55011 Allenby, B. R. (1999). Industrial ecology: Policy framework and implementation. Upper Sadle River: Prentice Hall. Allenby, B. R. (2009). The industrial ecology of emerging technologies. Journal of Industrial Ecology, 13(2), 168–183. Allenby, B. R., & Rejeski, D. (2008). The industrial ecology of emerging technologies. Journal of Industrial Ecology, 12(3). Alterra, et al. (2007). Review of existing information on the interrelations between soil and climate change. Wageringen: Alterra, Wageringen UR. Altmann, M., et al. (2004). Potential for hydrogen as a fuel for transport in the long term (2020–2030).
    [Show full text]
  • Final NEP White Paper
    NATIONAL ENERGY PROGRAM A National Energy Program The Apollo Program of Our Time Planning, Financing and Achieving Energy Independence and National Transformation By Lawrence Klaus May 2016 © Copyright 2014. All rights reserved by Lawrence I. Klaus NATIONAL ENERGY PROGRAM Preface The goal of the national energy program is to eliminate the gap between U.S. oil consumption and production and reduce green house gas (GHG) emissions in a decade as a milestone on the road to a sustainable energy future. With domestic natural gas supply plentiful, eliminating the “oil gap” will achieve energy independence. Reputable forecasts of the size of the gap vary from four to seven MBD. The oil gap objective is set near the top of the range at six MBD. President Obama set a goal to reduce GHG emissions to 26-28% below 2005 levels by 2025 at the Paris Climate Summit. This emissions objective is at least 1,400 million metric tons of CO2 equivalent. The energy and emissions objectives are set as a floor; not a ceiling. America must treat energy as a matter of national security and achieve the goal to avoid chaos. The “arc of instability” running through North Africa and Southeast Asia could become an “arc of chaos” involving the military forces of several nations. With seven of top ten nations with largest oil reserves in the region and reduced defense budgets affecting our ability to defend the oil supply we can no longer consider the oil fields safe. Turmoil in energy producing nations is on the rise with increased potential for future combat operations.
    [Show full text]
  • Shale, the New Oil Swing Producer?
    View metadata, citation and similar papers at core.ac.uk brought to you by CORE provided by RERO DOC Digital Library Shale, the new oil swing producer? Bachelor Project submitted for the obtention of the Bachelor of Science HES in International Business Management by Gregory HUTIN Bachelor Project Advisor: Benoit LIOUD Geneva, the 21st September 2017 Haute école de gestion de Genève (HEG-GE) International Business Management Declaration This Bachelor Project is submitted as part of the final examination requirements of the Haute école de gestion de Genève, for the Bachelor of Science HES-SO in International Business Management. The student accepts the terms of the confidentiality agreement if one has been signed. The use of any conclusions or recommendations made in the Bachelor Project, with no prejudice to their value, engages neither the responsibility of the author, nor the adviser to the Bachelor Project, nor the jury members nor the HEG. “I attest that I have personally accomplished this work without using any sources other than those cited in the bibliography. Furthermore, I have sent the final version of this document for analysis by the plagiarism detection software URKUND using the address supplied by my adviser”. Geneva, 21 September 2017 Gregory HUTIN Shale, the new oil swing producer? Gregory HUTIN i Acknowledgements I would particularly like to express my gratitude to my Advisor, Mr Benoit Lioud, for his support during this research. I would also like to thank my Commodity Trading Major Program teacher Mr. Robert Piller who, by sharing his passion for the commodities sector, made me discover this captivating domain.
    [Show full text]
  • Results and Outlook
    Results and Outlook February 2021 TotalEnergies : More energy, Less emissions Safety, Total’s core value Cornerstone of operational efficiency & sustainability Protecting our employees and partners Total Recordable Injury Rate for Total and peers* Per million man-hours 65 M masks delivered to 110 countries 1.5 7 M gloves delivered to 50 countries 1. 05 1.0 Hydroalcoholic gel produced in 6 countries 0.74 COVID impact on million hours worked: 0. only 8% less than 2019 0.5 73 2015 2016 2017 2018 2019 2020 One fatality in 2020 Continuity of operations * Peers: BP, Chevron, ExxonMobil, Shell 2020 Results and Outlook | 3 Transforming Total into a broad energy company : TotalEnergies Gases • Grow LNG (#2 player) and develop renewable gas (biogas / clean H 2) • Promote natural gas for power and mobility Renewables & Electricity • Accelerate investments in low carbon electricity primarily from renewables • Integrate along the electricity chain (production, storage, trading, supply) Liquids • Focus investments on low cost oil and renewable fuels (biofuels, SAF…) • Adapt refining capacity and sales to demand in Europe Carbon Sinks • Invest in carbon sinks (NBS and CCUS) Total will become TotalEnergies creating long-term value for shareholders 2020 Results and Outlook | 4 Growing energy production Mboe/d PJ/d 4 Electrons ~120 TWh Renewable gas 20 3 Gas 2 10 Renewable fuels 1 Oil 2019 2030 LNG and Electricity driving Profitable Growth 2020 Results and Outlook | 5 Growing sales while adapting to demand Energy sold to our customers PJ 12,000 % in sales
    [Show full text]
  • RUDYCH-THESIS-2018.Pdf (1.349Mb)
    Copyright by Darya Rudych 2018 The Thesis Committee for Darya Rudych Certifies that this is the approved version of the following thesis: OPEC’s Successful Failure: The Analysis of OPEC’s Political Decline in the late 1970s APPROVED BY SUPERVISING COMMITTEE: Supervisor: Jeremi Suri Kamran Aghaie OPEC’s Successful Failure: The Analysis of OPEC’s Political Decline in the late 1970s by Darya Rudych Thesis Presented to the Faculty of the Graduate School of The University of Texas at Austin in Partial Fulfillment of the Requirements for the Degree of Master of Arts The University of Texas at Austin May 2018 Abstract OPEC’s Successful Failure: The Analysis of OPEC’s Political Decline in the late 1970s Darya Rudych, M.A. The University of Texas at Austin, 2018 Supervisor: Jeremi Suri This thesis addresses the political decline of the Organization of the Petroleum Exporting Countries associated with the Iranian Revolution and the ensuing economic crisis. As the oil crisis in 1973-1974 elevated OPEC to the status of the dominant oil administrator, the crisis of 1979 undermined it. OPEC’s political influence, rooted in its position on the oil market, was, therefore, on a downhill. The effects of the Iranian events were two-fold. Firstly, the consumer panic led to a precipitous increase in oil prices which OPEC failed to handle letting its member-states take full advantage of it. Ceding the control over prices to the market forces, OPEC inadvertently undermined the purpose it was created for earning itself a bad fame on the international arena. Secondly, the Iranian Revolution intensified intra-group tensions and led to the significant erosion of the collective solidarity crucial for its cooperative behavior.
    [Show full text]