‘Drill, baby, drill’ is the new mantra of Big Oil – and now it’s coming after EVs

After abandoning its climate resolutions in 2024, Big Oil plans to drill for more oil than anyone wants – or can afford, says Chris Wright

Have you ever gone back over your new year’s resolutions from years ago and just thought, “What was I thinking?” Over the last year, it seems that Europe’s biggest oil corporations did just that.

Back in 2020, Larry Fink started the year with his traditional capitalist flex. As the CEO of the world’s largest investor, Blackrock, he sent a 2,000-word letter to CEOs of the world’s biggest companies outlining what he wanted to see in the world and what was going to determine where his company put their money. In the letter, he said that “climate change has become a defining factor in companies’ long-term prospects.”

These words ushered in a super-spreading frenzy of sustainability commitments that extended across companies like Delta Air Lines, Ford and even Europe’s biggest oil companies such as BP, Shell and Equinor. Soon after, BP announced it was planning to cut its oil and gas production by 40 per cent and the emissions of its products by up to 40 per cent as well by 2030. It also planned to be a net zero company by 2050, which is just what the climate doctor ordered. That was all ushered in by former CEO Bernard Looney.

At the same time, Shell committed itself to massive renewable energy investments, in the hope of becoming “the world’s largest electricity company”. And all was going well for these companies. In the run-off of the energy crisis, BP reported its annual profit of $28bn in 2022, the biggest in the company’s 114-year history. That same year, Shell similarly broke records, with an annual profit of $40bn.

However, only 12 months after reporting some of the biggest profit margins in the history of money, sustainability concerns have been dropped in a greed-addicted scramble to keep up with US and Middle Eastern competitors.

Since 2020, US oil giants Chevron and Exxon have shown nowhere near the same interest in diversifying their businesses or building up their climate credentials, and the market has rewarded them. These companies have seen their share prices increase by 53 per cent and 22 per cent respectively over the last five years, while BP has seen double-digit falls and Shell was in the red last year, regardless of record profit margins. As a result, when BP’s new CEO stepped in late in 2023, he quickly scrapped the company’s industry-leading targets, and last year announced plans to sell off its major wind energy investments in Japan and the US. It has transitioned from a company promising to phase down production to a company planning to invest $8bn more in new oil and gas expansions by 2030.

Suppliers are planning to flood the market seemingly right up until the sea level rise literally inundates many of the world’s major oil ports

Similarly, Shell has swapped its investments in offshore wind power for gas, with plans to increase its LNG business by 20-30 per cent by 2030. In its latest transition strategy, Shell’s chair Sir Andrew Mackenzie has shifted the company’s goal from electricity to biofuels, the goal being to “remain one of the world’s largest blenders and distributors of biofuels”.

Unfortunately, these shifts reflect an industry that is now just about competing to scrape the bottom of the shareholder buy-back barrel and has lost even the vaguest sense of curiosity about any short-term climate transition.

In the background of Cop29, Brazil’s state-owned Petrobras announced plans to spend close to $8bn to increase its oil and gas production by 14 per cent over the next four years, while Donald Trump spent the entire US election campaign arguing that he alone would get America producing more energy, when the reality that the US is now producing more oil every day than any country has, ever.

All of these increases meant that hardly anyone was surprised by the IEA’s latest industry prediction that the world’s biggest oil producers look set to drill way more oil over the next few years than the world even needs, or wants.

In June, well before Trump’s election, the IEA was already predicting that planned production increases in the US and Brazil would have a massive impact on global oil production by 2030, and outpace global consumption by as much as eight million barrels of oil per day.

Add on Trump’s plans to “drill baby, drill” since then, and who knows just how high this market distortion could become, with the suppliers planning to flood the market seemingly right up until the sea level rise literally inundates many of the world’s major oil ports.

There is however one major thorn in big oil’s billionaire side. The growth of electric vehicles is now so rapid that it is beginning to cut into oil demand, especially in China. In the world’s biggest car market, electric vehicles now regularly represent more than half of all cars sold each month, and oil demand last year may have dropped to 3.6 per cent lower than in pre-Covid levels.

Globally, the rise of EVs is now the “single biggest driver of the reduction in oil consumption”, according to BP. By 2030, even conservative estimates project that the global rollout of electric vehicles could reduce oil demand by over six million barrels of oil per day. To put it in perspective, that’s relatively close to the current oil demand of Japan and India combined.

But instead of getting on board the global electricity transformation, Big Oil is having none of it, and seems to have well and truly locked the doors on its seaside bulletproof bunkers. In 2024 alone, Big Oil not only backed away from its limited climate resolutions, it also shifted billions out of renewables, pushed hard against plastics bans, and is likely doing all it can to undermine plans to limit ICE (internal combustion engine) cars in the near future.

Its resolutions for 2025 now seem to be focused on ignoring the rapid electricity transition happening right in front of it and drilling far more oil than the world now wants, and far more than any of us can afford.