Oil Investment 🛢

by 15 Sep, 2021

Oil Investment

Since the day when America found oil for the first time, the commodity has been one of the most valuable ever. Oil has so many uses, and it is intertwined with everything we do in our lives. The Rockefellers created a monopoly by controlling the oil business during the industrialization period of the United States, and other world superpowers like Russia and Saudi Arabia have capitalized on their oil deposits. In fact, oil company Saudi Aramco is the most valuable business in the world. However, times are changing, and all this hype about oil is drying because it has had on the world. Climate change is a serious problem, and our current oil consumption is unsustainable. Fortunately, big oil is noticing that, and they are taking action.

Chevron, one of the largest oil companies, promised on Tuesday to spend 10 billion dollars through 2028 on green projects like carbon capture, biofuels, and hydrogen production. They see it as a viable business opportunity to enter in currently, and they decided to choose it over things like solar or wind power as they believe that there are more gains to be made in the former. Unfortunately, the investment will only account for 10 percent of Chevron’s capital spending through 2025, with the other portion going towards the oil business. Chevron hasn’t made a pledge yet to go to net-zero emissions, which other companies have, but I still believe this is a strategic move. They have now tapped into what could be the future, which reduces their carbon emissions, and if climate policy gets implemented this step helps them move further into the renewable energy business. If there isn’t much change and oil still stay as king, then they are able to reinvest their renewable profits into oil. This seems like a great business move, but climate activists would hope that they invest more in the coming years. Do you think this was a smart decision?

I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.

 

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