The New Seven Sisters of 21st-Century Oil: Part 1
Seven bloody sisters sat together in a room wondering how things ended up so poorly for them.
Times weren’t always tough, mind you. In fact, most of their time lately has been spent reminiscing about the good old days.
You see, those were the days they ruled the world.
I understand any eye rolls that come my way. Most of you probably think I’m being hyperbolic… but I assure you I’m not.
You know their names well: Anglo-Iranian Oil Company, Gulf Oil, Standard Oil Company of California, Standard Oil Company of New Jersey, Standard Oil Company of New York, Texaco, and Royal Dutch Shell.
Some of them might not ring a bell right away, but perhaps you know them by their names today: ExxonMobil, Shell, BP, Chevron, et al.
These were the companies that established a foothold in the Middle East in a post-World War society — a society fueled by petroleum.
I can picture it now: a group of seasoned geologists standing atop a windy sand dune looking across a Saudi desert and seeing nothing but dollar signs.
During the first half of the 20th century, the Seven Sisters controlled nearly 90% of the world’s oil reserves.
If anyone is still wondering how important oil has been to us during the 20th century, keep this chart in mind:
Think about this…
The world has consumed more than 1.3 trillion barrels of crude oil since 1970!
Make no mistake, these companies ran the whole show.
At least, they used to. The walls collapsed around them as the world’s national oil companies took over. The old Seven Sisters were replaced with the likes of Gazprom, CNPC, Eni, PDVSA, Petrobras, and of course, Saudi Aramco.
The new Seven Sisters dominated the latter half of the 20th century, hoarding over 90% of the world’s oil and gas reserves and more than one-third of global petroleum extraction.
You see, the very notion of Seven Sisters was simply the result of an Italian administrator who wanted to describe the monopolistic hold a few companies held over oil resources in the Middle East.
Truth is, the Seven Sisters are a generational family. The old Anglo-Saxon companies gave way to state-run nationals who now hold the keys to the kingdom.
Oh, dear reader, how the mighty have fallen.
Remember, their power is entirely predicated on the world’s growing addiction to oil.
Take another glance at the chart above, and you can understand why all of the sisters are now sitting in a bloody corner of the room.
One of the biggest blows came as ExxonMobil lost its status as the world’s largest publicly traded energy company.
Exxon lost its place at the top to NextEra Energy, a leader in the clean and renewable energy space.
It’s clear the Seven Sisters weren’t prepared for 21st-century oil.
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If nothing else, the COVID pandemic taught us just how vulnerable oil companies are right now. Global consumption jumped headfirst off a cliff over the summer as lockdowns became the new normal.
Pre-COVID, the world was using around 100 million barrels of petroleum every day. According to the numbers at the IEA, global oil demand is expected to average 91.1 million barrels per day in 2020 — a sharp 8.8% year-over-year decline.
The symbolic takeover by NextEra Energy isn’t a coincidence, either.
And here’s the most important part: Tomorrow’s society won’t be fueled by oil.
We’ve seen this transition coming, haven’t we? How many times have we talked about the rise of the electric vehicle?
Don’t get me wrong — you know just as well as I do that this transition won’t happen overnight.
However, you don’t need a tweet from Elon Musk to prove that the EV revolution is finally starting to get the foothold it needs to become a dominant force in the market.
Try to find me an auto company that isn’t actively prioritizing its electric and hybrid lines… I won’t hold my breath.
Battery technology has been growing by leaps and bounds with every new generation that is released.
Fittingly, there also happens to be a new group of Seven Sisters that has an iron grip on the critical supplies necessary for that technology to advance.
Except this time, the Seven Sisters have become four.
And they’re going to control the flow of this 21st-century oil.
Trust me, you’ll want to learn their names right away.
Next week, we’re going to talk in more depth about four massive companies that hold the keys to the kingdom when it comes to battery metals.
Look, I know nobody likes a tease. And as a premium member of Energy and Capital, it’s only fair that you have a jump on the rest of the market.
So I’ve convinced my publisher to let me help you stay two steps ahead of the herd.
My readers have been targeting and profiting from these battery players for years, and the latest round of winners has been a sight to behold.
I want you to have the same access to these trades that they do.
Until next time,
A true insider in the energy markets, Keith is one of few financial reporters to have visited the Alberta oil sands. His research has helped thousands of investors capitalize from the rapidly changing face of energy. Keith connects with hundreds of thousands of readers as the Managing Editor of Energy & Capital as well as Investment Director of Angel Publishing's Energy Investor. For years, Keith has been providing in-depth coverage of the Bakken, the Haynesville Shale, and the Marcellus natural gas formations — all ahead of the mainstream media. For more on Keith, go to his editor's page.
Energy Demand will Increase 58% Over the Next 25 Years
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