Publications: The Petroleum Economics Monthly

The Marginalization of the Oil Industry (July 2011)


On August 9, 2011, Apple surpassed ExxonMobil briefly in market capitalization. Many and perhaps most readers will attribute this development to the fickle irrationality of equity markets. They will argue that ExxonMobil is a real oil company. The firm’s supporters will assert that it owns oil fields and refineries and is more capable than any other private company in terms of taking on the really big oil projects across the globe. They will also derisively suggest that Apple simply distributes various “flavor-of-the-week” technological devices.


ExxonMobil’s backers may even, ironically, consult their iPhone® or iPad® while defending the world’s largest privately held oil company. They will, however, find no defense there for downplaying this occurrence. Apple’s surge in market capitalization past ExxonMobil is a watershed event, one that likely portends the oil industry’s marginalization. Over the next two decades, the petroleum industry will probably see its position in the energy market shrink drastically, even as energy becomes less and less important in the global economy.


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