WION Edit: Oil drives the global economy

Every day we hear that 'data' is the new oil or 'lithium battery' is the new oil. What about 'the oil'? Is oil still the most valued asset? Is the oil industry facing a threat of extinction? 

On WION Edit, we will try to analyse the might of the oil industry and its place in the global economy.

Recently, Forbes compiled a list of the 15 most profitable industries. Data, batteries or arms were not in the top three, but oil and gas extraction was.

You know what topped the list - accounting and legal services - they're more profitable than oil.

Whether we like it or not, the global economy is set up in a way in which oil is the prime mover, the commodity of choice and top value. 

The tech industry dominates the wall street, but the asset prices are highly inflated and the market valuations are not the reflection of the health of the tech industry.

Oil drives the global economy. Foreign policies of countries including ours are devised to derive benefits in oil trade.

The signs of a post-oil future are visible, but that future is far away. Elon Musk, electric vehicles, battery-fuelled devices, extreme weather events, climate protests and even climate emergency - these have become phrases.

But the truth is that last year was the most profitable year for oil producers in the US in a long time.

In a world where the demand for crude oil is gradually decreasing, oil remains a very profitable commodity.

Clearly the oil and gas industry is not going away. Though the industry faces problems like volatile prices, fall in production, but these are only reflective of the broad slowdown in the global economy, not the future of the oil industry.

A recent report by Mckinsey shows that renewables account for only 19 per cent of the overall energy mix. That figure is predicted to go up to 34 per cent by 2050.

This alone shows that the oil and gas industry will be on a strong footing for the next 30 years easily. There may be a lull now, but demand will go up in future.

And renewables cannot satisfy the bulk of the energy demand. This is indeed a tricky consolidation phase for the industry, but to write obituaries for the oil industry is preposterous, academic and one-sided. The demand for energy will be the deciding factor.

(Disclaimer: WION Edit is the channel's take on the big events of the world)