Leading oil executives and ministers will assemble in Houston for one of the largest energy conferences globally, emboldened by record-breaking mergers, steady oil prices, and less push for a widespread transition to clean fuels.
Notwithstanding the conflict in Eastern Europe and the unrest in the Middle East, global oil prices have stayed in the $75–$85 per barrel range, supporting profits but not slowing economic development. Stock markets still keep spurring deals, which is why Big Oil is getting even bigger.
The yearly CERAWeek conference coincides with an increase in the demand for biofuels, solar, wind, and oil and gas. Energy markets have enabled global flows to reorganize as consumers choose more local energy providers or put up with longer maritime supply chains.
Dan Yergin, vice chairman of S&P Global, the conference organizer, and a Pulitzer Prize-winning writer on global energy, noted that with all the geopolitical unrest, price stability is an amazing thing.
According to Yergin, talk of price wars has given way to discussions about energy security, in contrast to previous conferences where the focus was on market-share conflicts between OPEC and US shale oil producers.
It was quite easy to picture a way to energy transition while demand and prices were low, but Yergin added that energy security is once again a topic of discussion due to the conflict in Russia and Ukraine and price shocks.
More than 7,200 attendees will gather to hear the leaders of major producers, including BP, Chevron, Sinopec, Saudi Aramco, Exxon Mobil, and Petronas, provide their most recent outlook on the energy markets.
While the prices of oil are high, natural gas has been overwhelmed due to overproduction. However, according to energy strategist Vikas Dwivedi of the financial firm Macquarie Group, this year is going to be a transition year leading up to a much more optimistic gas and power market.
Leading oil ministers from Kuwait, Saudi Arabia, and Iraq are conspicuously absent this year, which falls during the Islamic holy month of Ramadan. No representatives from Russia are expected since they were not present the previous year.
With the absence of OPEC, global prices are currently at $85 a barrel, which Dwivedi said helps pay the budgets of its members but does not hasten the switch to electric cars and renewable energies.
OPEC predicts comparatively robust economic development and oil demand, a perspective that stimulates further activity in the oil and gas sector and mergers. The almost $250 billion in energy mergers made in the United States last year sparked concerns about concentration and a delay in regulatory approvals.
The conference sessions about hydrogen fuels and carbon sequestration technologies, which have emerged as the oil industry's two preferred methods of combating global warming, are reflective of climate concerns. This year's hot topics include artificial intelligence's impact on the production of energy and carbon emissions.
Joe Scalise, the director of energy and natural resources at consulting firm Bain & Co., said that the willingness of energy consumers to pay more for clean fuels or new technology to reduce emissions is an increasing concern, as is the capability of energy businesses to generate a sufficient return on investment.
Over the past ten years, US shale has been a recurring theme at CERAWeek conferences. It has changed the energy markets and made the US the world's top producer and exporter of crude oil.
This year, acquisitions by Chevron, Exxon Mobil and ConocoPhillips will make them the biggest producers in the leading US shale field. This change is expected to tame a previously uncontrollable aspect of the world's oil output. The production techniques and investments made by Big Oil could stabilize the extreme boom-bust cycles in shale.