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The ‘great oil price debate': the low oil price — reasons behind and anticipated consequences

15 March 2016, 4 - 7:30 PM CET

TUSIAD Avenue des Gaulois 13, Brussels 1040

In June 2012, when the Brussels Energy Club opened its doors for its first ever membership meeting, Brent Crude, the international oil price benchmark, was hovering at $100 per barrel. In March of that year, it was consistently topping $120 (p/b). Those were times of unprecedented turbulence in the Middle East in the wake of Arab Spring, while global demand had recovered from the slump of the financial crisis of 2008-09. OPEC and the other major oil producers could barely keep the taps flowing.

Now, some four years later, the international oil markets are into their second year of what can only be described as a major u-turn. In fact, for the oil man, the world has seemingly turned on its head: and hardly for the better. In March 2016 Brent is hovering in the low $30s (p/b), having already dipped below the $30 mark in January: the lowest price the market has seen for 13 years.

The reasons for the near-four-fold slide in the oil price are both debatable and varied: we often attribute the radical decline in global oil to the (so called) "shale revolution" in the US, the (alleged) response to this revolution by the Saudis — including Riyadh's (purported) price war vis a vis US shale producers — and the subsequent reluctance of the world's major producers to tighten the hatches on supply. But while we debate the causes of the current downward trend in the oil market, it is the consequences of the price collapse that really need to be watched with an eagle eye. While a conventional answer to the question of who wins and who loses from the low oil price may allude to the plight of the energy producers and relief for the consumers, things are much more complex in our post-COP21 energy world.

And now, nearly four years after he opened the first meeting of the Brussels Energy Club in summer 2012 with the $100 oil price of the time, we welcomed Professor Anatoly Zolotukhin back to Brussels to tell us about how the world will evolve amidst an oil price of just above $30. Prof Zolotukhin told us how his native Russia will cope with the low oil price, where the government is now forced to reconsider this year's budget but also where cash rich oil companies, who sell their barrels abroad in dollars, take advantage of a highly devalued rouble at home. Prof Zolotukhin also talked about how the big oil companies are likely to adjust their investment strategies into the foreseeable future, given their likely lower revenues, and whether this well lead to slowing growth in the countries of their operations. Finally, Prof Zolotukhin talked us through as to where this is all likely going, enlightening us with his forecast for the market — and the subsequent impact this will have on key stakeholders — in the years ahead.

Thank you for joining us at the Brussels Energy Club on 15 March 2016 for the "Great Oil Price Debate"!

Program :

  • Welcoming remarks by Dr Bahadir Kaleagasi, Chairman, Brussels Energy Club,

  • Setting out the debate by Dr Marat Terterov, Executive Director, Brussels Energy Club,

  • Presentation by Professor Anatoly Zolotukhin

  • Roundtable discussion with members and guests of the Brussels Energy Club (NB: the Chatham House Rule will apply).

  • Supper buffet reception and networking opportunities with the speaker and Club members will follow the interactive discussions


Low oil prices - reasons behind and ant cons Mar_15_2016-2
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Rectorat Counsellor and the Scientific Director of the Institute for Arctic Petroleum Technologies at the Gubkin Russian State University (National Research University) of Oil and Gas; Professor Emeritus of Stavanger University, Norway; vice-President, World Petroleum Council, Moscow




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