How sudden geopolitical events bring about long-term changes in oil use
Add Axios as your preferred source to
see more of our stories on Google.
Sudden changes in world politics can bring about permanent changes in oil-and-gas use, per a recent Morgan Stanley report.
Driving the news: Geopolitical unrest in the late '70s and early '80s — the Iranian Revolution and start of the Iran-Iraq war — disrupted a lot of oil supply that, in turn, sent prices skyrocketing. That sudden jolt to the global oil system permanently cut oil consumption per capita that’s stayed with the world ever since, says Martijn Rats, managing director for equity research for Morgan Stanley.
- Auto manufacturers started to improve engine efficiency and oil began to be replaced as an electricity source.
Why it matters: Given today’s persistent environment of low oil and gas prices, it raises the question of what other kind of forces could bring about change — and if extreme weather or continued price reductions in new tech might jolt policymakers into emissions-cutting action.
How it works: Given these three trends — global population, GDP per capita and oil consumption per capita — have very different orders of magnitude, Morgan Stanley indexed them to a common numerical measurement.
- The purpose of the chart is to show how these three have grown over a long period of time relative to each other, so their absolute levels are not as important.
