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Photo: Zhang Peng/LightRocket via Getty Images

A new analysis by Goldman Sachs looks at how the perception that low-carbon energy would cut future oil demand — especially via electric vehicles — could actually boost the finances of the world's most powerful oil companies over the coming decade or so.

Why it matters: The lengthy report and that counterintuitive conclusion underscore the complicated interplay between powerful legacy companies, emerging technologies and market behavior.

Big picture: It looks back at industry investment cycles over the past 40+ years: expansion, contraction, and one now taking hold again after the downturn called "restraint."

  • It's marked by "disciplined investments, further industry consolidation, structural cost deflation" and other forces.

Winners and losers: This heralds the start of a "new golden age" for the "reborn seven sisters," referring to ExxonMobil, Shell, Chevron, BP, Total, Equinor and Eni, the research predicts. Historically, the majors perform best financially during "restraint" phases.

Where EVs come in: One part of the report looks at how prospect of energy decarbonization, especially the focus on EVs, is among the forces helping to disincentivize investments in big, expensive supply projects. This will continue recent years of low investment in new supply projects.

The verdict: "Decarbonization and EVs could be the best thing that's ever happened to Big Oil," the Goldman Sachs analysis led by Michele Della Vigna notes. The report says:

"[T]he demand impact of EVs, even under the more bullish scenarios, is likely to be smaller than the supply displacement from fewer [final investment decisions] driven by the higher risk premium on long-term oil. "
  • EVs will likely cut oil demand by somewhere in the one to four million barrels per day range by 2030, while the oil production lost from projects delayed or scuttled since the 2014 downturn is in the 6 million range.
  • EVs are expected to start having a net tightening effect on the oil market in the 2020s.

Why this helps Big Oil specifically: The biggest companies stand to reap benefits in years ahead from their continued investments during the downturn.

"Like the ‘Seven Sisters’ of the 1950s, these global Majors are once again dominating complex, long lead time developments in non-OECD countries, locking in higher returns, better fiscal terms and a more reliable global oil services supply chain," the report states.

Go deeper: Bloomberg explores the report here.

Go deeper

2 hours ago - World

Brazil begins distributing AstraZeneca coronavirus vaccine

Containers carrying doses of the Oxford/AstraZeneca vaccine arrive in Brazil. Photo: Maurio Pimentel/AFP via Getty Images

Brazil on Saturday began distributing the 2 million doses of the AstraZeneca coronavirus vaccine that arrived from India Friday, Reuters reports.

Why it matters: Brazil has the third highest COVID-19 case-count in the world, according to Johns Hopkins University data. The 2 million doses "only scratch the surface of the shortfall," Brazilian public health experts told the AP.

Sullivan speaks with Israel's national security adviser for the first time

Israeli national security adviser Meir Ben Shabbat U.S. Photo: Mazen Mahdi/Getty Images. U.S. national security adviser Jake Sullivan. Photo: Chandan Khanna/Getty Images

U.S. national security adviser Jake Sullivan spoke on the phone Saturday with his Israeli counterpart Meir Ben Shabbat, Israeli officials tell Axios.

Why it matters: This is the first contact between the Biden White House and Israeli prime minister's office. During the transition, the Biden team refrained from speaking to foreign governments.

Biden speaks to Mexican president about reversing Trump's "draconian immigration policies"

Mexican President Andrés Manuel López Obrador. Ismael Rosas/Eyepix Group/Barcroft Media via Getty Images

President Biden told his Mexican counterpart, Andrés Manuel López Obrador, on a phone call Friday that he plans to reverse former President Trump’s “draconian immigration policies.”

The big picture: The Biden administration has already started repealing several of Trump’s immigration policies, including ordering a 100-day freeze on deporting many unauthorized immigrants, halting work on the southern border wall, and reversing plans to exclude undocumented people from being included in the 2020 census.