The impending transformations of the energy market in the age post-COVID-19

Antonio Turiel discusses what the future might hold for the energy sector The COVID-19 pandemic has created a serious health crisis, and undeniable economic havoc, a toll that will only become fully evident in the coming years. Some consequences will be less evident than others. One of the obvious consequences is the huge, deep impact that it has had on the oil sector. Since 2013, due to increasing exploitation costs and lower profitability, divestment from the global oil sector has become almost a norm, except in the US fracking sector. From 2014 to 2016, the investment in oil upstream fell by 46% worldwide, and the slight recovery of the subsequent years was mainly fuelled by US fracking, while investment on the rest of the sector was stagnant or slowly decaying. The arrival of COVID-19 has only exacerbated this seven-year trend, with an additional fall estimated at about 20% with respect to the levels of 2019. COVID-19 has also represented the coup de grâce for the already financially stressed fracking sector. With some sensible bankruptcy filings (as those of Chesapeake or Chaparral), the accumulated amount of all debt faults in the sector since 2013 is already more than...