If Gaza is a Conflict over Oil Money investments, Norway points to a Near Future where Petroleum is Worthless

Ann Arbor (Informed Comment) – The Biden administration has concluded that the horrific Hamas attacks on Israel of October 7 and after aimed at derailing the normalization negotiations between Saudi Arabia and Israel. But why should this issue be so pressing as to cause a war? Saudi Arabia is the world’s swing petroleum exporter. The US and Russia produce as much or more petroleum daily as Saudi Arabia. But they consume most of it domestically. Saudi Arabia exports most of its petroleum, because it has a relatively small population.

Saudi oil riches make it an ideal investor in Israeli startups, not to mention that Israeli oil supplies are undependable and it sure would be nice to be able to make deals for Saudi petroleum. Saudi Arabia’s lack of diplomatic relations with Israel stand in the way of all the money to be made by the two countries.

The normalization process, however, promised to sideline the 5 million stateless Palestinians under Israeli occupation. There was a danger that Israelis would benefit from Saudi oil money far more than the Palestinians. Not to mention that Israel has Gaza under an economic blockade that makes it one of the poorer places in the world — so the Israelis would get rich off Arab capital while continuing to keep 70% of Palestinian youths in Gaza unemployed.

If these considerations do lie in part behind the Hamas decision to start this conflict, the only good news is that oil won’t be worth much in only a decade or two, making a Saudi-Israeli pairing far less lucrative, and far less worth fighting over.

Norway has emerged as a laboratory of the future when it comes to the electrification of transport. It has the highest rate of EV purchases in the world, and the capital of Oslo plans to ban gasoline cars from its downtown.

The second-best seller among EVs in Norway, Volkswagen, whose ID.4 is popular there, has decided to stop selling gasoline vehicles in Norway as of December.

Ingvild Kilen Rørholt of Foundation Zero is quoted by E24 as saying that Volkswagen’s decision is entirely logical, given Norway’s climate targets and energy policy.

Some 90% of new car registrations in Norway are now plug-in vehicles. Of those, the vast majority are battery-electric vehicles (BEVs), while 6% are plug-in hybrids that use gasoline when the battery runs down.

Of course, it takes many years to replace the existing stock of vehicles, so of the total number of passenger cars on the road in Norway, about 20% are now electric vehicles.

By 2025, the government has decreed that only electric vehicles will be available for sale.

Jameson Dow at Elektrek points out that the country’s national statistics show a huge 9% decline in gasoline purchases for September year over year. He argues that gasoline purchases in Norway have shown a long decline, which may be accelerating. He says that as quickly as US coal sales are cratering, Norway’s gasoline sales are declining twice as fast.

The International Energy Agency has predicted that this year or next will see peak oil in China. That is, the country will start purchasing less and less gasoline every year from here on in. Norway, which of course is a much smaller country, probably had reached peak oil even earlier.

Obviously, as more countries see EVs hog new car sales market share, gasoline and diesel purchases will begin falling rapidly. Dow argues that many big oil companies may go bankrupt as a result.

What he doesn’t say is that we are likely to see a vast geopolitical shift of power away from the Gulf oil states (Saudi Arabia, the United Arab Emirates, Kuwait, Bahrain, and Oman) toward solar and wind energy producers such as Morocco. This shift will also have a profound impact on Israel, which has bet on fossil gas and has done little toward electrified transport. It could be left behind by the greening of the Middle East.