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February 7, 2022

Twitter oil and gas supply trends: OPEC most mentioned term Q4 2021

Twitter: Offshore Technology lists the top five terms tweeted on oil and gas supply in Q4 2021, based on data from GlobalData’s Oil and Gas Influencer Platform.

The top trends are the most mentioned terms or concepts among Twitter discussions of more than 150 oil and gas supply experts tracked by GlobalData’s Oil and Gas Influencer platform during the fourth quarter (Q4) of 2021.

1. OPEC – 1,307 mentions

The Biden administration being wrong in requesting the Organisation of the Petroleum Exporting Countries (OPEC) to boost crude oil supplies, OPEC+ due to raise production by 400,000 barrels per day (bpd), and Kuwait being a reliable supplier enabling the OPEC and OPEC+ to increase production were some of the popular discussions that mentioned OPEC in Q4 2021.

Anas Alhajji, an energy economist, shared a thread on why the Biden administration is wrong in asking the OPEC for more crude oil supplies amid a rise in crude oil prices. The group’s decision raised tensions with the US, which believed that the rising prices could derail its economy. Alhajji cited several reasons to detail why more crude oil supplies are not required, one being that there are no crude shortages. Secondly, demand was not higher than the supply, as several analysts have been mistaking supply with production. Crude oil inventories in the US, for example, increased by 20 million barrels (Mbbl), Alhajji added. Furthermore, the surge in gasoline prices in the US is due to the issues within the refining sector, bad weather conditions, and heavy regulations rather than lack of crude oil supply, Alhajji explained.

OPEC was also mentioned by Samir Madani, co-founder of an independent online platform tracking and reporting crude oil shipments across geographies, who shared an article on OPEC+’s plans to raise production by more than 400,000bpd. The OPEC+ group’s agreement until September 2021 was to raise cumulative output by 400,000bpd a month although the group was due to hold an online meeting to discuss further production, the article noted. Industry sources stated that the OPEC+ was aiming at going beyond its current target due to consumer pressure for more crude oil supply and oil prices nearing a three-year high. OPEC oil output rose to its highest levels in September 2021, since the beginning of the pandemic in April 2020, the article detailed. Furthermore, Russian oil and gas condensate output rose to 10.72Mbpd in September, the highest level since the 11.34Mbpd in April 2020.

In another tweet, Amena Bakr, Dubai deputy bureau chief and chief OPEC correspondent for energy information company Energy Intelligence, shared an article on Kuwait being a secure and reliable supplier to the global oil market while playing an active role within the OPEC and OPEC+. The country gradually increased production to meet the 400,000bpd production target of the OPEC+, the article noted. Kuwait was also prepared to increase production in line with OPEC+ bringing a significant equilibrium to the oil market, according to Dr Mohammad AL-Fares, the minister of oil and higher education.

2. Fossil fuel / fossil fuels – 690 mentions

The importance of fossil fuels being highlighted by OPEC amid an increased focus on energy transition, the state of energy transition across global economies, and global oil giants stressing the need for fossil fuels despite the world’s transition to cleaner fuels were some of the popular discussions in the fourth quarter.

David Shepherd, energy editor at the Financial Times, shared an article on US oil prices hitting a seven-year high after OPEC+ refused to increase production. Shepherd noted that by refusing to increase production the OPEC+ may be sending a reminder to policymakers about the importance of fossil fuels as the focus on energy transition continues to increase. Furthermore, fossil fuel producers are being side-lined in the rush for cleaner energy by larger economies despite accounting for a majority of their energy supplies, the article noted. OPEC countries are considering higher prices as essential to boost investments in oil and gas production as demand for fossil fuels is still growing. The lack of investment in the sector could lead to a bigger crisis in the future, the article highlighted.

Andy Critchlow, a business journalist, further tweeted about the state of energy transition globally. The article revealed that countries such as Saudi Arabia, the Gulf Arab states, and the US continued to account for a larger share of fossil fuel demand per capita compared to Africa, South America, and Southeast Asia. Europe and North America are leading in terms of expansion of low-carbon fuel demand globally and are extensively investing in technology and infrastructure to support energy transition. The article detailed that effective policies need to be developed to decarbonise energy intensive economies. Countries such as India and China, for example, have been encouraging the growth of low-carbon systems such as renewables although fossil fuels such as coal continue to remain a major part of their energy mix. The risk with developing countries is that they are slow to adopt expensive climate change policies, which could slow their economic growth, the article detailed.

In another tweet, Giovanni Staunovo, a commodity analyst, shared an article on top energy executives from global energy companies stressing the need for fossil fuels for the foreseeable future despite the push for cleaner energy. The CEOs of oil companies such as Exxon Mobil, Saudi Aramco, and Halliburton agreed on the need for oil and gas globally as fossil fuel demand rebounded rapidly in 2021, the article highlighted. The demand for natural gas, for example, is already at its pre-pandemic levels, while oil demand reached near 2019 levels. Energy majors are limiting exploration and production to achieve energy transition, although the demand for oil and gas is projected to increase. The required energy transition strategy has not been developed as several gaps need to be addressed until a full-scale energy transition can be launched, the article detailed.

3. Pricing – 644 mentions

The increase in oil and gas prices as their demand continued to grow, US President Joe Biden ordering a probe into anti-consumer behaviour by oil and gas companies amid high gasoline prices, and Biden announcing the release of oil reserves to curtail gas prices were some of the popular discussions in the last quarter of 2021.

Amy Harder, executive editor of climate and clean tech-focused publication Cipher, shared a thread by energy and commodities columnist Javier Blas on the increase in oil and gas prices due to a robust growth in their demand. Blas tweeted that an International Energy Agency (IEA) report highlighted that the world is not making sufficient investments in clean energy to prevent a climate catastrophe, but more importantly it is not spending enough on fossil fuels to meet their growing demand. The report stated that higher prices are a signal that supply is low and the continued high demand for fossil fuels may lead to tight supply in the future resulting in higher and volatile prices. Reducing investment in fossil fuels will not lead to the achievement of energy transition goals, the report added.

Pricing was also mentioned by Michael E Webber, chief science and technology officer at France-based utility ENGIE, in an article on President Biden asking the Federal Trade Commission (FTC) to probe into the possibility of anti-consumer behaviour by oil and gas firms amid rising fuel prices. President Biden stated that gas prices continued to rise even though the price of unfinished gasoline declined and therefore wanted the commission to investigate the oil and gas markets for any anti-competitive or illegal conduct, the article detailed. Webber tweeted that there was no illegal activity and that the high oil and gas prices were a result of low prices for the past 18 months and recovery of demand.

In another tweet, Susan Sakmar, a visiting assistant professor and energy law scholar at the University of Houston Law Center, shared an article on President Biden announcing the release of 50Mbbl of oil from US reserves in an effort to reduce prices of gasoline. The President stated that the Department of Energy will release the reserves from the Strategic Petroleum Reserve, the largest release from the reserve in the US history. He added that the move will help in fighting high energy prices and reduce the country’s reliance on oil as it shifted towards clean energy sources.

4. Exports – 150 mentions

President Biden ruling out the possibility of restoring a decades-old ban on crude exports, emissions from exports not being counted under a country’s emissions, and Ecuador placing a force majeure on all oil export and import contracts were some of the popular discussions in Q4.

Giovanni Staunovo shared an article on President Biden’s administration urging domestic oil producers to boost output and drill on existing leases, while conclusively ruling out the possibility of restoring a decades-old ban on crude exports. The US energy secretary Jennifer Granholm stated that the government was not going to hinder domestic production of oil and gas and supported an increased output. Experts attribute the change in tone to growing frustration among oil executives due to the lack of support from the government. The article further noted that the administration has been making other efforts to reduce gas prices for consumers, including the release of additional oil reserves.

The term was also mentioned by Susan Sakmar with relation to fossil fuel exports continuing despite climate pledges. The article detailed that several countries including the US are planning to continue oil and gas exports while working on phasing out climate-warming fossil fuel emissions at home. Sakmar tweeted that US oil and LNG exports were first approved under the Obama/Biden administration and are not counted against the exporting country’s emissions under the Paris Agreement. Jeremy Moss, political philosophy professor at the University of New South Wales, believes that exporting countries should limit emissions by voluntarily declining to ship fossil fuels overseas.

In another tweet, Dan Graeber, an independent energy and foreign policy correspondent, mentioned the term in an article on Ecuador declaring a force majeure on all oil contracts, including exports and imports. The force majeure was issued due to river erosion near pipelines that transport crude oil. The article highlighted that the Trans-Ecuadorian Pipeline System and Heavy Crude Pipeline, along with the Shushufindi-Quito petroleum products pipeline had to be closed. State-owned oil producer Petroecuador was forced to shut down production at its fields as the produced oil could not be transported. Several international agencies including the U.S. Army Corps of Engineers assisted the country in finding a solution to the soil erosion.

5. Reserves – 140 mentions

Gulf national oil companies (NOCs) having an advantage over shareholder-owned oil companies in terms of reserves, US’ discussions with Asian economies to release oil from strategic reserves, and China releasing oil product reserves to address shortages were some of the popular discussions in the fourth quarter.

Jim Krane, a Wallace S. Wilson fellow in energy studies at Rice University’s Baker Institute for Public Policy, tweeted his take on the climate shift in oil production. He believed that western international oil companies (IOCs) face increasing legal, political and financial pressure associated with their roles in the climate crisis, while NOCs enjoy advantages in terms of cost, carbon emissions and reserves. Saudi Aramco, for example, has 227 billion barrels of untouched reserves that are five times the total reserves controlled by the big five IOCs including ExxonMobil, Shell, Chevron BP, and TotalEnergies. The article highlighted that the Gulf NOCs face slight or no climate pressure from shareholders, institutional investment funds, or home country regulators apart from enjoying supportive governance.

Another discussion around the term was with respect to a South Korean official stating that the country was reviewing a request from the US to release stocks of crude oil reserves, according to an article shared by Giovanni Staunovo. The official, however, maintained that the country will not release oil reserves due to an increase in oil prices, but may release oil reserves to address supply imbalance. The statement comes after some countries in Asia such as China expressed an agreement in releasing some reserves to control the high fuel prices as requested by the US. Oil prices, however, fell sharply after Austria announced lockdowns due to rising Covid-19 cases, with Germany also planning to impose restrictions.

In another tweet, Ben Winkley, co-founder of research and consultancy firm Eido Research, discussed China’s plans to release gasoline and diesel reserves to certain regions in order to meet the shortages and stabilise the rise in energy prices. The release was in response to the supply and demand deficit of refined oil in the country, according to the National Food and Strategic Reserves Administration. The agency, however, did not specify the amount of reserves or the regions to which the reserves will be released. Electricity cuts and falling crude production have squeezed diesel supplies and created shortages across the country, the article highlighted.

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