Comment by jillesvangurp
5 hours ago
One consequence of the transition to renewable energy and electrified transport, is that oil imports will start to decline. And the dollar is of course the currency of choice for that.
The US economy and other countries that export fossil fuels will feel the impact over the next decade or so. The energy transition might go a lot quicker than people seem to expect. Currently about 20% of global car sales is electric. In some countries it's well over 50%. China of course being one of them. And they are making rapid progress with electrifying freight as well. This is already impacting their fossil fuel imports. They still import a lot.
One effect that I think people underestimate is that while it will take a long time for all the ICE vehicles to disappear, the new ones do most of the driving. So, new EVs have a relatively large impact on fuel consumption and imports pretty early on. E.g. Chinese diesel imports apparently already are being impacted by their rapid deployment of tens of thousands of electrical trucks. Soon hundreds of thousands. That's already a third of the market in China and will probably head for well over 50% in a few short years. The EU is not that far behind.
The ripple effect that's going to have on oil trading, refinery capacity, etc. is going to be substantial. Of course current geopolitics is speeding things up massively. LNG and oil scarcity is causing a lot of issues globally and countries are accelerating moves to reduce their dependence on that.
Demand destruction will collapse profits and accelerate the oil/dollar downfall. Saudi Arabia can profitably pump oil probably under $10/barrel. If demand drops, thats where oil should be.
China with [EVs|Solar|BESS|Turbines] will replace all of the fossil fuel countries (US, middle-east, Russia). This is probably the biggest transition in the history of mankind. This is energy production, storage and all the appliances that use electricity. After this, its incredibly hard for any other country to compete.
Oil and gas is more valuable for other uses besides burning it up into thin air. Humans have just been pretty sloppy any country that has plenty of oil and gas won’t go broke.
> China with [EVs|Solar|BESS|Turbines] will replace all of the fossil fuel countries (US, middle-east, Russia)
I dont agree with china having the same position as the FF exporters. Simply because with renewables, you export the means to produce energy rather than the energy itself. So in terms of monetary value, china will be selling alot less panels than the FF countries sell oil. And other countries can also manufactor renewables tech themselves, while with oil they couldnt materialize it under their feet
Basically i think the paradigm of the energy trade being cornered for politcal controll wont exost with renewables. Renewables are decentralized and so not controllable
ACtually no , even with the export of primary goods that go into the manufactue of renewables like solar the price differential still favours China. A recent example is the boom of local solar manufacture in India whil relies on solar modules imported from china.The assembled panes are still 2X the price of a similar fullly aseembled one from China. And not due too subsidies of labour - a lot of the value chain is highly automated and densely colocated diffrerent from other industrail setups where complimentary industries are geographically separeted which increase final costt by adding unreliable transport and delays into the mix. So at scale and with high volume will continue to be the dominated by China , wear and tear even with renewables will continue to favour the first mover as tech evolves over time.The solar modules/batteries of 10-15 years ago are not the same effficency as those of today.
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This is actually not the first major energy transition.
The world moved from coal to oil for transport and shipping fairly quickly due to the higher energy density and significantly easier handling of liquid vs solid fuels. Using pipes and tubes was a huge labor savings compared to having people shovel coal into a hard to control boiler.
Saudi Arabia can profit at those prices, but it can't sustain its living standards at those prices unless they pump like crazy. I recall reading that it was around 40 bucks a barrel where things would start looking not ideal for the princes.
Saudi Arabia needs oil prices at ~$86.60/barrel to balance their budget, per Bloomberg. It is not the marginal cost to pump a barrel, but what a country needs to support their sticky spending from previously assured energy exports. Governments will collapse long before we approach low single digit oil prices on the global market.
The World Is Awash With Oil and Prices Are Poised to Keep Falling - https://www.bloomberg.com/graphics/2025-global-oil-supply-pr... | https://archive.today/hkhtI - December 18th, 2025 (Control -F "Crude Price Forecasts Are Below Levels Needed for Budgets")
> China with [EVs|Solar|BESS|Turbines] will replace all of the fossil fuel countries (US, middle-east, Russia). This is probably the biggest transition in the history of mankind. This is energy production, storage and all the appliances that use electricity. After this, its incredibly hard for any other country to compete.
Strongly agree. China is replacing petrostate economic demand with demand for their clean tech products, which keeps their deflationary economy afloat, provides them soft power, and will transition the yuan to a global reserve currency. Today countries by dollars to by petroleum ("petrodollar"); tomorrow, countries will want yuan to buy "manufacturing fiat," to trade with the world's factory (China is 1/3rd of global manufacturing capacity, as of this comment). Stocks of assets vs flows of energy.
Indeed. Electricity will be the only abstraction layer of energy, all end uses (transportation, cooking, heating, cooling, appliances) will switch to electricity.
Electricity can be generated from any source (dirty + clean), but the abstraction layer of electricity will allow the grid to continuously increase the clean fuels. It helps that the cleanest is also the cheapest. Solar panels are cheap as dirt. In 1975, a solar PV module cost $128.27 per watt. In 2026 it costs $0.1 - $0.2 per watt, a thousand times cheaper. In 1975, only satellites could afford solar. Today, its the cheapest source of energy.
China will be an electrostate. Are there any other electrostates? Maybe Bhutan, Costa Rica, but they are too small.
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If you buy yuan just to turn around and spend them you aren't holding the yuan.
But China is already in decline before reaching this ascendancy.
I think new models will result in new structures, not just a switch from the US to China.
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But, how much of the extracted oil becomes ICE fuel? Because other transports cannot be converted that quick (air, sea...) and most if not all petrochemical industries will still need to exist even if all cars drive electric. So how big will be the effect of crashing fuel demand?
25% of oil production is for cars
16% for trucks and buses
7% for aviation
4% for shipping
2% for rail and domestic waterways
25% + a chunk of the 16% (city buses, shorter distance or smaller trucks, etc) is a good amount.
https://www.statista.com/statistics/307194/top-oil-consuming...
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I would add energy generation to ICE fuel. This is about 84-86% of total I believe
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If the price were to drop all the way down to $10/barrel, demand would skyrocket.
The future where oil demand is so low and and will remain low even after low prices is much further ahead I'm afraid.
China is much more of a "fossil fuel country" than the US. They've got a ways to go to even catch up.
https://ourworldindata.org/grapher/energy-mix?tab=stacked-di...
I think you're not telling the full story with that chart. https://ourworldindata.org/grapher/energy-mix?tab=line&stack...
87.5% vs 83.1%
Renewables have to go up by 10x (or more, with electrification of all the things) everywhere pretty much in the coming decades.
Uh, that chart shows they source a greater percentage of their power from renewables than we do with the exception of nuclear and biofuels. Their wind, solar and hydropower bars are all wider, and they're building more nuclear.
They just don't have our easy-access shale fields. If it wasn't for fracking our coal percentage would likely be just as high
> In some countries it's well over 50%. China of course being one of them
As always with these stats, I like to check whether that includes plug in hybrids, and it does. Those are still mostly dependent on fossil fuels, although they use less. Pure BEV adoption seems to depend on your radius from Norway: https://www.autonergy.co/blog/global-ev-adoption-leaderboard...
(France should really be doing better, after all migration away from fossil fuels was a motive behind the Pompidou/Messmer nuclear buildout in the 70s!)
Those numbers are from before Mr Trump decided to do his very best to convince the world to stop using oil. Which happened to coincide beautifully with VW group, Stellantis and Chinese firms having an all out price war on smaller EVs, which have until now been the underserved segment of the market. In Denmark it’s certainly not 36%, its probably closer to 90% of new cars being EVs, it’s simply financial suicide to buy a new ICE car here.
Thats personal vehicles. But if China is going full speed with electric trucks, that will be the fastest gamechanger. Diesel trucks run 300K miles, under 5mpg, consume a gazillion gallons. Electric truck fuel costs are probably 10%.
Its really sad that India is pro fossil fuel, it has an opportunity to follow China's strategy.
India is pro-coal (has local sources), but anti-oil (import dependence). It is only pro-coal because there's no other alternatives at cost/scale for baseload generation.
You will find Chinese electric trucks making inroads (heh) everywhere from UK and Europe (1) to Africa (2)
now that it's a proven business model in the centre of the these things, of course.
1) https://octopus.energy/big-on-batteries-octopus-and-catl-tea...
2) https://mybroadband.co.za/news/motoring/648661-electric-truc...
I don’t know what you mean by India is pro fossil fuel. It’s aggressively building out solar and has multiple nuclear reactors being simultaneously constructed. It would love to be an electrostate but is doing everything it can to satisfy its populations energy needs in the meantime which means they can’t just stop using coal and oil.
Wow. On mobile Firefox I have to use two fingers to scroll that site.
Yeah, that's some cursed JavaScript :-/
I had never considered the demand destruction effect of EVs on fuel like that. It makes sense though, because the biggest users will justify switching to electric faster because the payoff time is quicker.
I'll be surprised if renewables overtakes oil for energy production anytime soon. I could see nuclear doing that, but I never can get past the challenges of maintenance and replacement costs for solar panels, turbines, and especially for storage.
I will be very happy to be proven wrong here over time though. New battery technology could make a big improvement. And I keep hearing that AI will give us answers to all our technical challenges and lead to an age of abundance where we all make a high income, so there's that too.
Are we using that much oil for energy? The leading non renewable power source now is natural gas or similar, which I didn't think interacted much with the oil market. So even without nuclear, if the future is natural gas pipelines for baseload oil would still be mostly a manufacturing and vehicle fuel deal.
My understanding is that the shift towards natural gas is largely because it is a very cheap byproduct of fracking (for oil). It happens to be "greener" when burned so gets green-washed also.
I wonder what would happen if oil demand was significantly reduced, thus reducing fracking.
Ah yes, nuclear is known for having cheap replacement costs, especially Fukushima was known for being particularly cheap.
Solar power is the worst, it gets more expensive every year.
Regarding batteries... It's over for sodium based batteries (the ones promising us cheap battery storage) because dry coated Lithium ion batteries are coming onto the market which means sodium batteries are an economic dead end.
Until we get dry coated sodium ion batteries of course. Not sure it's over.
There's a lot of rosy or false assumptions here.
For example, if every road vehicle became an EV tomorrow, global oil demand would drop from 100M barrels per day ("Mbpd") to... ~60M. And that assumes EV replacements for things we don't have EV replacements for yet, like long haul trucking. We also have avgas, for which there's no replacement, and global shipping.
But beyond fuel there's a significant range of non-fuel usages (eg industrial, plastics, construction).
There's another factor here too and that is that the oil economy props up the weapons economy. Nobody goes to war over a solar panel [1]. That sounds like a good thing (and it is) but you have to realize there are forces who like that oil drives war became war is a huge profit opportunity.
[1]: https://www.theenergymix.com/no-one-goes-to-war-over-a-solar...
> One consequence of the transition to renewable energy and electrified transport, is that oil imports will start to decline
Unless Jevons Paradox. Cheaper energy might mean more oil use. 1) Never underestimate the world's hunger for energy; renewables and electrification have huge disadvantages (you can't get close to the energy density of gas/diesel). 2) Oil is used for most products. 3) Even if its use declined, that would raise the price without making it less important.
EVs don’t need renewables. What makes them attractive despite the bad marketing in the West is that they can be powered by anything that can create electricity, like coal; which is something China has a lot of
The transition to EVs is key to the national security of many countries that currently do not have energy security like China and even most if not all member countries in the EU.
China doesn't have a lot of coal, at least not relevant to their energy requirements. They still have to import a huge amount and remain vulnerable from an energy security perspective.
https://www.iea.org/countries/china/coal
>"remain vulnerable from an energy security perspective" - not while having Russia close by.
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All those EVs but demand is higher than ever.
https://www.statista.com/statistics/271823/global-crude-oil-...
https://ember-energy.org/data/china-cleantech-exports-data-e...
Meanwhile everyone is being confused with AI-slop.
What's good in electric cars? If a large power plant is destroyed how are you going to charge your electric car to escape?
There is no need of large powerplants. Thats the legacy grid, only to make Warren Buffet rich. New grid (that needs to be built) will have solar panels, BESS + EVs for storage, either off-grid or a small community grid. The new grid is distributed and indestructible.
I hope its strictly an American fantasy to think you're driving out of anywhere when something like that happens.
Buy a bicycle.
Following Hurricane Sandy, many were left without power and ultimately even gas was strictly rationed. So it's not out of the ordinary to imagine an event like that happening.
https://www.nj.com/news/2012/11/sandy_gas_ration_12_counties...
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Strictly an American fantasy, that you're left on your own in the face of any kind of disaster.
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In Phoenix we all live in the shadow of the Palo Verde nuclear generation plant. And once on the radio I heard some pundits discussing contingencies if PV should glitch out and have a life-threatening disaster. And they matter-of-factly said, "you're gonna be walking." And that would be the truth; in a full-scale evacuation of a city like Phoenix, the freeways are not built to accommodate traffic like that, and yours truly has no car anyway, so I would be packing light and walking in the opposite direction, and/or ignoring the orders, to meet whatever fate awaits.
But I bet there would be a lot of bicycle and vehicle theft going on, in such an event.
I know I have a problem with "suspension of disbelief" but I find it always weird in those dystopian movies where they all drive monster trucks on an apparently endless supply of scavenged fuel and spare parts. But I'm positive exactly this Hollywood spirit is what fuels (pun intended) most of those hyper-optimistic answers.
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And your gasoline pump works perfectly fine without power? Or the refineries?
Gasoline is much easier to store (you can keep a reserve in your cellar) and much easier to carry and trade than electricity.
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> And your gasoline pump works perfectly fine without power?
Most decent emergency / contingency plans will have the fire department, police or whatever local group show up at one or two designated gas stations to provide power, or require these stations to have on-site emergency power.
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It’s always charged. You plug it in when you get home and it’s ready to go when you leave.
> If a large power plant is destroyed how are you going to charge your electric car to escape?
Solar panels and home battery storage. This is also going to seriously screw over electrical grid and especially powerplant operators... residential will, at least in suburban and rural areas, not need a grid any more except during prolonged phases of low solar yield.
What are you afraid of happening?
This is such a perverse and anxious fear imo
A reasonable scenario might be a cyberattack taking down large portions of the grid for a prolonged time. It's not impossible to achieve something like that, Stuxnet proved the concept of corrupting PLCs driving powerplants ages ago.
Alternatively, even outside a cyberwar scenario, bad weather has been shown to take down power grids for entire regions for days, sometimes weeks.
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You can have solar panels and batteries right at home. You can't have an oil rig at home.
Are u serious? If ur oil refinery is destroyed how are you going to pump oil to your house?
You can buy it on a black market unlike electricity.
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I did a lazy ask google, and it thinks less than 3% of crude oil is used for energy. The vast bulk of oil being used: 'transportation (gasoline, diesel, jet fuel), heavy machinery, and non-energy uses like asphalt and plastics rather than power plants'.
That is of course, one of the big problems of 'going green' - electricity production is low hanging fruit and understood by the general public.
When that's 'solved' (solar, wind, geo, nuclear), how do we solve the other 97%?
Oil really isn't going anywhere. It will be a slow tail, perhaps too slow to stop emissions.
https://www.iea.org/world/oil
Around 50% is used for road transport, though, which is poised to be replaced and was one of the parent poster's main points.
We knew how to make synthetic hydrocarbon one hundred years ago. Nazi Germany used the Fischer Tropsch process to make synthetic fuel after the Royal Navy blockaded their oil import. The only reason we're still digging up fossil fuel is because it's cheap. According to some calculation, green hydrocarbon from atmospheric CO2 and electrolytic hydrogen could be commercially viable when fossil petroleum reaches $200/barrel , which is really not that far off.