Good morning, here's what the Oilman has for you today:

• Oil, Gas Subsidies Hit Record in 2022

• BRICS Adds Six New Members

• Upcoming Oil and Gas Events

• Tweet of the Day

Oil, Gas Subsidies Hit Record in 2022

Hydrocarbon subsidies hit an all-time high of $7 trillion last year.

The horrific calculation comes from the IMF, which of course, warned this state of affairs is bad for the planet.

A year like no other

The record subsidy size for oil and gas was the result of two factors.

First, the post-pandemic recovery surprised many who’d assumed demand growth was dead.

Second, the Russian invasion of the Ukraine and the Western response.

Those events led to an energy crunch in Europe.

The crunch led to soaring energy prices.

These, in turn, led to massive subsidies to keep fuels and electricity relatively affordable.

So environmentalists can breathe a sigh of relief.

The jump was not just a result of natural demand growth.

End all subsidies now and see what happens

The IMF says that most of these oil and gas subsidies were implicit ones.

In case you’re wondering what these mean, here it is: “the cost of damage from air pollution and global warming.”

How these can be called subsidies is an interesting question, but the IMF’s not answering it.

It just calls them subsidies to make it sound more outrageous.

And it says that now that energy prices are on the decline would be an ideal time to scrap all subsidies.

How you scrap “the cost of damage” is unclear.

But you could surely end direct subsidies.

The governments of some poor nations are doing it to lighten their debt load.

Guess how happy their populations are about this.

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BRICS Adds Six New Members

The BRICS bloc has accepted six new members in its first expansion round, grabbing a bigger share of global oil production capacity.

The new additions include Saudi Arabia, Iran, the UAE, Argentina, Egypt, and Ethiopia.

“A Wall of BRICS”

And most of them are in the Middle East.

Every single one of the new members, except Ethiopia, is a substantial producer of oil and gas.

Egypt and Argentina are the ones with the most underdeveloped reserves.

Yet they are slowly but surely getting there.

Argentina is home to the second-largest shale gas reservoir in the world in the Vaca Muerta formation.

Egypt has been home to several major gas discoveries in recent years and is a regional export leader hopeful.

The other three need no introductions.

With the expansion, BRICS will now account for about 40% of global oil production.

OPEC 2.0 or the de-dollarization club?

How about both?

Saudi, the UAE, Iran, and Russia are already partners in the OPEC+ group.

Now it will overlap with BRICS.

And that doesn’t look very good for those outside the two.

Because that’s additional influence over oil markets by the world’s largest producers.

Not only will the larger BRICS hold sway over oil markets.

It could accelerate the de-dollarisation drive started by original BRICS members Russia and China.

Actually, forget “could.” It will accelerate the de-dollarisation drive.

What it will all come to, we have yet to see.

Upcoming Oil & Gas Events

• August 28: SOOGA Fall Golf Outing, Oxbow Gold Course, Belpre OH

• August 28-September 1: International Meeting for Applied Geoscience and Energy Houston TX

• August 31: ND Oil PAC Golf Tournament Bully Pulpit Golf Course, Medora ND

Around the Global Patch

🇸🇦 Saudi Arabia considers Chinese bid for nuclear power plant.
🇨🇳 Sustainability of China's investment-led growth model.
🇬🇧 UK Independent accelerates development with wildcat prospect.

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