Scare them clean

This year’s CERAWeek delivered a shocking surprise to the world of energy. Oil demand had broken another record last year. Apparently, nobody had foreseen the development, at least nobody who matters. Worse still, this year is about to see another record breaking event in oil demand — even the IEA had to admit it. The joke: no one knows how they could be so wrong.

Actually, it’s not a joke. Analysts attending the industry conference openly talked about how they got demand wrong and discussed how they had essentially — and dramatically — underestimated certain factors while overestimating — equally dramatically — other factors. We’re all as shocked as they are.

With oil demand still very much alive contrary to hopeful forecasts, the oil industry demonstrated previously absent cockiness, daring to call openly for a reconsideration of the energy transition.

Apparently, the industry was just as surprised as analysts by how oil demand held up in the face of what everyone saw as adversity, including slow economic growth, high interest rates, and — hands on hearts, everyone — the EV revolution.

Williams CEO Alan Armstrong summarised it nicely for the FT: “Roll the clock back four or five years ago, they were like: ‘Oh, it’s all going to be renewables and batteries’ — and now they’re saying: ‘Wow, wow, this is going to be way too expensive.’” Amazing, right? Totally unexpected.

The revelations made at CERAWeek were serious. They were also dangerous — for the transition. But the transition propaganda machine, if not the transition itself, moves fast. It has already switched gears in response to these revelations. It’s cranking up the fear output. After all, if you can’t rely on people to kill oil demand of their own free will, you’ve got to scare them clean. As usual, it’s totally going to work.