Middle Eastern Oil Producers Worried More People Will Buy EVs As A Result Of High Oil Prices

Middle Eastern oil producers are worried that more people will buy EVs in light of the high oil prices. Iraq’s oil minister, Ihsan Abdul Jabbar, shared these thoughts with the New York Times, noting that members of the Organization of the Petroleum Exporting Countries (OPEC) are concerned about this possibility.

Jabbar noted that OPEC plans to increase output by 400,000 barrels a day next month. However, he shared how Iraq, which is a member of OPEC and other Middle Eastern producers was worried that the high prices could lower demand or, worse (for them but not us), hasten the transition to EVs and reduce our dependence on oil. He told the New York Times, “We are happy in the short term, but not happy if this lasts.”

Oil and gas prices have been rising due to the conflict that Russia started in Ukraine. However, oil prices have also dropped as a result of the new Covid-19 outbreak in China. Earlier this week, on Tuesday, oil prices fell below $100 per barrel. The global benchmark, Brent crude, dropped 7.4% to $99.91 per barrel. (It’s $107.49 on Thursday at the time of publishing this.) The US benchmark, West Texas Intermediate crude, fell 6.4% to $96.44 per barrel (it’s $104.15 at the time of publishing).

EVs will continue to grow in the various markets. It’s only a matter of time before we eventually reach the point where there are more EVs on the roads than ICE vehicles. Also, even at this stage, it seems that rising gas prices have gotten more people to look at and buy electric cars. “As fuel prices rocket, Auto Trader — the UK’s largest automotive marketplace, with 64 million monthly visits — is seeing a resurgence in consumer demand for electric vehicles (EVs) on its marketplace, with the volume of enquiries for both new and used EVs reaching record levels over the weekend. But as the electric revolution gathers pace, the UK’s largest automotive marketplace’s data shows that it is Kia and Hyundai that have been the most successful brands to make the transition to electric, leaving their premium European counterparts lagging in the popularity stakes,” the UK auto giant writes.

“The proportion of electric cars viewed on Auto Trader had dropped from a high of 26% in late September 2021 when the fuel crisis took hold, to just 16% in February. However, since prices at the pumps started to spike, so too has consumer interest, with new EVs now accounting for more than one in five (22%) of all new advert views, whilst the volume of enquiries sent to retailers through Auto Trader shot up at the weekend (12th – 13th March), to an all-time high of 30.7%. In just a week, the volume of advert views for new EVs has increased 30% (rolling 7-day average).”

Another thing to consider is that price gouging is insane. Oil companies are making huge profits by playing up the volatility and supply disruptions while raising prices more than they need to. This has a long run of domino effects. Yesterday, I had to call my neighbor because an Uber trip home from the store rose from its normal ~$17 to almost $60! One driver told me that people don’t want to drive because it costs more to drive for Uber with the high costs of gas than they get paid by Uber for driving.

I think it’s highly selfish for these oil producers to worry about their profits when people are struggling to just go to work and make ends meet. But that’s just my two cents on the matter.

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