BP’s eagerness to sell its Alaskan business reflects a broader shift.
According to The Economist, the oil industry faces a basic problem. If the price of Brent crude, the global benchmark, surpassed $100 a barrel, about 90% of the world’s oil could be extracted with a return on capital of at least 10%, according to Rystad Energy, an energy-research firm. Today Brent fetches just over $40 a barrel, making about half the world’s oil reserves too costly to produce (see chart 1). Oil prices are expected to rebound as post-pandemic demand picks up, but by how much is fiercely debated.