Global reserves of oil available for extraction showed a “sizable drop” of 9% last year, in what an analyst at Rystad Energy is calling “good news for the environment” that could still “deal a major blow to energy security”.
In a note earlier this month, Oslo-based Rystad said recoverable oil reserves fell by the same margin in 2020, Politico Pro reports. This year’s total still stands at a mind-numbing 1,572 billion barrels, down 152 billion from last year.
“Energy security is a matter of redundancy,” Per Magnus Nysveen, Rystad’s head of analysis, said in a statement. “We need more of everything to meet the growing demand for transport, and any action to curb supply will quickly backfire on pump prices worldwide, including large producers such as the U.S.”
Politico notes that the drop in available oil reserves “comes as many nations scramble for energy resources amid global shortages and as President Joe Biden and world leaders simultaneously navigate the challenges of realizing climate pledges and easing high energy prices.”
The Calgary Herald describes the global fossil energy market as “a complicated picture of competing incentives and disincentives. On one hand, the imperative of climate change has led to policies around the world that are meant to limit demand, and producers have responded accordingly by curbing investment in production. At the same time, short-term demand for energy has surged amid the disruption brought by Russia’s invasion of Ukraine and the sanctions Western governments have levelled at the world’s third-largest producer of oil and gas.”
Rystad also reduced its long-term estimate for undiscovered oil worldwide, from a trillion barrels in 2018 to 350 billion barrels today, “due to a rapid collapse in investor appetite for exploration exposure, leading to fewer government leases.”
In Canada, the Herald says, the immediate result of tightening supply has been a 50% increase in gasoline prices over the last year. While U.S. gas prices have been falling, the Washington Post writes, analysts expect a fresh round of economic sanctions to drive them up again in October, just weeks before midterm congressional elections.
Rystad lists Saudi Arabia as the country with the biggest recoverable oil reserves, at 275 billion barrels, followed by the U.S. at 193 billion, Russia at 137 billion, Canada at 118 billion, and Iraq at 105 billion.