OPEC isn't worried about electric cars
Do the interests behind oil production see electric cars as a threat to their business? Not much, it seems.
Just over five years after the first modern electric cars went on sale in significant numbers, they have become firmly entrenched in the marketplace.
Carmakers are planning more electric models to satisfy both consumer demand and increasingly-strict emissions standards.
But do the interests behind oil production see electric cars as a threat to their business?
Not much, it seems.
Increased electric-car adoption (along with emission limits and rising fuel-economy laws) could permanently reduce global demand for oil, but the oil industry does not seem concerned, notes the Financial Times in a recent survey of the state of electric cars.
Last year, OPEC predicted that just 6 percent of cars on the world's roads in 2040 would be powered by anything other than gasoline or diesel.
ExxonMobil made a similar prediction, saying electric cars could account for less than 10 percent of global new-car sales in the same year.
But the past few years have shown that even relatively small decreases in oil demand can have a major effect on the price oil companies receive.
Crude prices dropped from $114 a barrel in mid-2014 to less than $30 in early part of this year, according to the International Energy Agency (IEA).
That trend will only continue as automakers launch more electric cars, and increase the fuel efficiency of internal-combustion models to meet tougher global emissions standards.
Some energy analysts suggest that what today's oil executives may rationalize as a temporary downturn could become permanent.
While OPEC is presenting a strong outward face, one of its most prominent members is already starting to prepare for a future of vastly decreased oil revenues.
Saudi Arabia has embarked on long-term plans to transition its economy from oil to investment over the next few years.
Using proceeds from an initial public offering (IPO) of the state-owned Aramco oil company, it will create a $2 trillion ""Public Investment Fund," which will then invest in other industries.
Deputy Crown Prince Mohammed bin Salman—the plan's chief architect—has stated that this could allow the Saudi economy to survive without depending on oil revenue as early as 2020.
Saudi Arabia will keep producing oil as long as it is economically viable, but officials view the investment plan as a hedge against the vulnerable position an oil-dependent economy puts the country in.