BP just dropped its latest annual look at global energy markets, and though the plunge in oil prices might seem temporary, the company thinks there are larger effects at play.
“Rather, they may well come to be viewed as symptomatic of a broader shifting in some of the tectonic plates that make up the energy landscape, with significant developments in both the supply of energy and its demand,” said CEO Bob Dudley in an introductory statement.
Changes on the supply side should be pretty obvious. Thanks to controversial fracking techniques and massive investments in shale, the US has raised its oil output dramatically. It now produces more of the stuff than Saudi Arabia for the first time since 1991—a fact that gives an extra edge to the two countries’ battle for energy supremacy.
And that’s not the only country the US eclipsing: It’s also extending its lead in oil and gas over Russia. The shifts are ”a prospect unthinkable a decade ago,” Dudley said.
On the demand side, last year was the second in a row that emerging-market economies, or those outside the Organization for Economic Co-operation and Development, made up the majority of global oil consumption.
Though weak growth in richer economies like Europe and the US has been one of the factors weighing on energy prices—in addition (paywall) to heightened production—it’s noteworthy that their influence is fading.