Big oil companies are switching to lower carbon energy methods as governments and investors look to greener alternatives, according to a Goldman Sachs analyst. Michele Della Vigna, head of the investment bank’s EMEA Natural Resources Research, told CNBC a global oil drain could strike next in the 2020s as firms struggle to adapt. The warning comes as Donald Trump claimed waivers on his Iran sanctions were the reason for a recent fall in oil prices.
Mr Della Vigna said: “In the 2020s we are going to have a clear physical shortage of oil because nobody is allowed to fully invest in future oil production.
“The low carbon transition will come through higher, not lower oil prices.”
Oil giants have realised they need to adopt more carbon-friendly measures to continue attracting investment, he added.
The cost of building gas infrastructure meant state-backed companies were best placed in the new global environment.
So-called “new Seven Sisters” of oil are considered the most influential firms outside the Organisation for Economic Co-Operation and Development (OECD).
Saudi Aramco, Russia’s Gazprom, NIOC of Iran, China National Petroleum Corp, Brazil’s Petrobras, Venezuela’s PDVSA, and Petronas of Malaysia are identified as the seven most powerful non-OECD firms currently.
The original so-called “Seven Sisters” were firms in the 1950s that later became BP, Chevron, Shell, Exxon Mobil and Royal Dutch Shell.
Now, European oil companies like Shell and Total have stolen a march on US firms making the switch from “big oil” to “big energy”.
Mr Della Vigna said: “We talk about the new seven sisters emerging, dominating the global oil and gas market because nobody else can finance these mega-projects.”
Coal companies have seen their stock fall in the last five years as investors switched to renewable energy suppliers.
Oil markets plummeted in recent weeks over fears of oversupply, with Mr Trump claiming credit for the fall.
The US president said: “If you look at oil prices they’ve come down very substantially over the last couple of months. That’s because of me.”
Brent and WTI prices plunged by around 20 per cent from their most recent high in October.
The 10-day decline is believed to be the longest price fall on record for US crude.