PowerSwitch

I always thought as everyone switched over to electric vehicles the price of petrol might come down, as demand will reduce. I'm now fearing that OPEC have a long term plan to always keep production behind demand, thus keeping prices inflated; this is mainly driven by what they're doing now. What do other members think is going to happen? Because i'll freely admit economics is not a specialty of mine.

The relatively small scale use of electric vehicles in Western Europe is of very little relevance to global oil supply and demand.
Demand for fossil fuel vehicles is booming in India, China, and many other places. Air transport which is virtually 100% oil powered is increasing.

I expect that OPEC will in the near term adjust production so as to keep prices at about the present level. In the longer term I expect oil prices to increase substantially.

So you don't expect BRIC economies to really embrace EV transport?

mr brightside wrote: ↑10 Aug 2022, 07:00 So you don't expect BRIC economies to really embrace EV transport?

China is moving quicker than most to electrify their transport......
https://www.wired.com/story/china-ev-in ... -charging/

However, as Adam2 says, this is still dwarfed by increases in oil usage....
And of course, the ever increasing global population....

mr brightside wrote: ↑10 Aug 2022, 07:00 So you don't expect BRIC economies to really embrace EV transport?

Probably, eventually, but in the near term many of them do not even have a reliable and sufficient electricity supply for charging electric vehicles. Also petrol is often much cheaper than in the UK.

If you think that things are bad in the UK, google "bad indian wiring" and consider the likely consequences of connecting an EV charger to some of the installations shown.

And in many places the power comes from either coal or diesel fuel, so little environmental gain by going electric.

Mark wrote: ↑10 Aug 2022, 08:16 ............................
And of course, the ever increasing global population....

Most of the increase in population is in the Third World where they use comparatively small amounts of fossil fuel. Although that small amount is increasing it is still a very small amount which is dwarfed by countries like India and China where prosperity is slowly spreading through an already large population. We need to finance India especially to jump a technological generation and go straight to EVs rather than fossil fuelled vehicles.

Why can't a country, say us, choose to buy crude off a non OPEC country like Kazakhstan at a lower rate? The UK will be seeing a lot of EV use, so the people still running petrol cars will be fewer and fewer; a small oil producer could meet our needs. Or is this not like buying sausages down Leeds market?

In my opinion, the only way to beat OPEC would be by a mixture of demand destruction by electric cars and by synthesis (or capacity to synthesise) of petroleum type fuels by some kind of direct CO2 capture, biomass hydrogenation or synthesis from coal on an international basis. Then the buyers could probably dictate the price. I could see this being done by the West or China in maybe 10 years but will require a lot of extra energy. I don’t see the Third World doing this but then again the third world could not pay the same high prices as the West.

The World's 10 Biggest Oil Exporters in 2020:
1. Saudi Arabia - 15% of global oil exports - OPEC
2. Russia - 11.6% of global exports
3. United States - 8.2% of global exports
4. Canada - 7.4% of global exports
5. Iraq - 7.1% of global exports - OPEC
6. United Arab Emirates - 6.6% of global exports - OPEC
7. Nigeria - 4.7% of global exports - OPEC
8. Kuwait - 4.3% of global exports - OPEC
9. Kazakhstan - 3.9% of global exports
10. Norway - 3.5% of global exports

The World's 10 = 72.3% of the total.
Surprised that Iran doesn't make the 'top 10' - maybe sanctions related ?

OPEC currently has 15 Members – Algeria, Angola, Congo, Ecuador, Equatorial Guinea, Gabon, IR Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates and Venezuela - guess that they control approx. 50% ?

OPEC just seem to behave too much like a coke cartel to me, but that's the capitalist way. I think we're long overdue some sort of alternative.

mr brightside wrote: ↑15 Aug 2022, 12:23 OPEC just seem to behave too much like a coke cartel to me, but that's the capitalist way. I think we're long overdue some sort of alternative.

There is an alternative.

Electric road vehicles, charged by renewably generated electricity could replace most of the oil used for road transport.

High speed electric trains powered by renewably generated electricity could replace most of the oil used used for short haul air travel.

Electric planes for short hop travel to otherwise inaccessible islands.

This would reduce oil use to the extent that OPEC and russia would be of far less importance than at present.

Being optimistic we could electrify the majority of European road traffic by 2040. China is also electrifying rapidly, but I do not think they are doing it fast enough to reduce their total oil demand as their economy continues to grow. The US is well behind, and has huge political headwinds against electrification. The rest of the world is nowhere, and very unlikely to be able to afford the up front costs of building Evs or competing against the first world for the finite mineral resources needed.

I Think there is very little chance of reducing global oil demand fast enough to outrun supply decline due to peak oil production.

I think that EVs will be forced upon many in the world by the fact that most manufacturers will move away from ICE production as EVs take over. Volvo have already stated that they will move out of ICE production by 2025, I think it was, and other companies will follow suit. The production of ICEs is fiddly and relatively expensive so there comes a point where further investment won't be made. That will be the reason that the world will go electric.

Concerning Volvo's ambitions, where are the going to get the semiconductor material from? Surely it can't be acquired fast enough, as there is already a big demand for smartphones and tablets etc. In fact, how much gear that was motor on/off back in the day is now on a soft start? Angle grinders for one. Many kitchen appliances that used to be mechanically sequence timed are now logic/inverter control, like washing machines.

According to classic economists, Mr B, the market will provide in one way or another when the price is right.