Daily Energy Report
Oil/Gas reserves decline, Indian EVs, China buying more Iranian oil, China energy security, US gas exports to Mexico, Indonesia delays climate deal, Petrobras CEO makes expected statement, and more.
Chart of the Day: Reserves of 187 companies declined in 2022
Figure (1) above shows that the oil and gas reserves of 187 publicly traded global E&P companies declined in 2022. The US EIA reported that their reserves declined by 25 or 5.6 billion barrels. The chart shows how reserves dropped in 2020 (-9%) and recovered in 2021 (+9%).
EOA’s Main Takeaway
Before anyone screams “peak oil” or “this bullish,” global oil reserves increased in 2022. According to the Oil & Gas Journal, world oil reserves increased by 22 billion barrels, from 1,735 billion barrels in 2021 to 1,757 billion barrels. World natural gas reserves increased by 159 from 7,297 tcf in 2021 to 7,456 tcf in 2022. RaystadEnergy reported an increase in oil and gas reserves of 56 billion in 2022.
If reserves increased, what is the story beyond that chart? Why did reserves decline? The answer is simple: they divested from Russia whether they did that voluntarily or were forced out. The chart and the story of declining reserves cannot be reported on their own without a global frame and accounting for the war in Ukraine.
Story of the Day
New Indian Express: Kerala on fast lane, second after Delhi in EV adoption
Electric vehicle adoption is on the rise in Kerala, accounting for over 10% of new vehicle registrations, making it the second state after Delhi in EV adoption. Out of the 4.57 lakh vehicles registered by August 15 in Kerala, 47,329, or 10.3% are EVs. Despite lower tax benefits compared to other states, Kerala's EV sales are on track to surpass 50,000 in a year for the first time. In contrast, 98.52% of Kerala’s 1.64 crore vehicle owners still use conventional fuels.
EOA’s Main Takeaway
Western analysts and watchers must realize three points:
A large portion of the numbers mentioned are two and three-wheelers. These are already fuel efficient and any losses in oil demand from electrification is relatively small.
Some of these electric vehicles are replacing CNG vehicles. However, CNG vehicles are also rising.
Despite the increasing pentation of electric and gas vehicles, Indian oil demand is increasing. The recent decrease in oil demand is seasonal, yet the demand in July 2023 is higher than that of July 2022 as shown in Figure (2) below.
News of the Day
The Energy Information Administration (EIA) reported the highest weekly oil demand for the year as shown in Figure (3) below. US demand for overall petroleum products increased last week by 0.976 mb/d to 21.663 mb/d.