When Politics and Supply Collide: How Geopolitical Worries and Low Inventories Drove Oil Prices Up

 

Setting the Stage: The Year 2000

At the dawn of the new millennium, the global oil market faced a perfect storm: low inventories, rising demand, and an unexpected jolt — the USS Cole bombing in October 2000. These forces converged to push Brent crude prices into the $32–35 per barrel range, a level not seen since the early 1990s.

1. The USS Cole Attack: A Shock to Maritime Security

On October 12, 2000, the USS Cole, a U.S. Navy destroyer, was attacked by al-Qaeda suicide bombers while refueling in Aden, Yemen. The explosion killed 17 U.S. sailors and injured 39 others.

Though the attack didn’t directly target oil infrastructure, it sent shockwaves through energy markets, particularly because:

The bombing occurred near the Bab el-Mandeb Strait, a key chokepoint for oil tankers linking the Red Sea and the Arabian Sea.

It heightened fears of future attacks on shipping lanes, pipelines, or oil-producing nations in the Gulf.

Result: Oil traders priced in a geopolitical risk premium, pushing crude prices upward despite no immediate supply disruption.

2. Low Inventories Fueled the Fire

At the same time, oil inventories in the U.S. and Europe were at multi-year lows:

U.S. commercial crude stocks were well below the five-year average heading into winter.

OECD stockpiles had failed to recover fully after Y2K demand and earlier OPEC cuts.

This left little room for error. Even minor supply disruptions or fears of one could send prices soaring.

With the market already tight, the USS Cole incident didn’t have to halt supply — it simply reminded the world of how vulnerable oil logistics really were.

3. Market Response: Brent Tops $35

In the weeks after the attack, oil prices remained elevated, fluctuating between $32 and $35 per barrel.

OPEC, which had previously raised output in response to rising prices, hesitated to act further due to the fragile security situation and uncertain demand.

The event underlined a critical truth in oil markets: Perception of risk is often as powerful as actual disruptions.

4. Long-Term Lessons for the Oil Industry

a. Strategic Reserves Matter

Governments realized the importance of having ample strategic petroleum reserves (SPR) to cushion future shocks. The U.S. later expanded its SPR holdings.

b. Geopolitical Risk Premiums Became a Pricing Factor

Traders began routinely baking in geopolitical risks when evaluating oil futures — a practice that continues today (e.g., Iran-Israel tensions, Red Sea attacks).

c. Energy Security Became a Policy Priority

The USS Cole incident and subsequent Middle East instability influenced Western policies to diversify supply sources, increase domestic production, and eventually accelerate investments in renewables.

The USS Cole bombing, combined with historically low inventories, created the perfect storm for higher oil prices in 2000. It marked a turning point, where geopolitical shocks began to carry more weight in oil pricing — not just supply and demand.

It’s a powerful reminder that in energy markets, confidence and perception are commodities too. When they falter, prices follow.

WHAT IS BRENT CRUED IN OIL INDUSTRY

 

Brent crude is one of the most important and widely used oil benchmarks in the world. Here's a clear breakdown of what it is and why it matters in the oil industry:

What Is Brent Crude?

Brent crude is a type of light, sweet crude oil extracted from oil fields in the North Sea, specifically the Brent, Forties, Oseberg, and Ekofisk fields.

• "Light": It has low density, which means it's easier and cheaper to refine into gasoline and diesel.
• "Sweet": It has low sulfur content, making it cleaner to process and burn.

It’s called "Brent" after the Brent oil field, discovered in the 1970s and named after a type of wild goose.

Why Is Brent Crude Important?

1. Global Pricing Benchmark

Brent crude is the global benchmark for about 2/3 of the world’s oil.

It’s used to price oil exports from Europe, Africa, the Middle East, and parts of Asia.

Other benchmark oils include WTI (West Texas Intermediate) and Dubai/Oman crude, but Brent is the most influential.

2. Used in Financial Markets

Traders use Brent futures to hedge and speculate on oil prices.

Brent is listed on exchanges like ICE (Intercontinental Exchange).

3. Represents Seaborne Crude

Brent crude is transported by sea, making it easier to ship globally compared to WTI, which is more landlocked.

Brent vs. WTI

Feature             Brent Crude                     WTI Crude (U.S.)

Origin             North Sea (Europe)             Texas, USA

Transportation     By sea (more global)             Inland pipelines

Sulfur content     ~0.37% (sweeter)       ~0.24% (slightly sweeter)

Common Use     Global benchmark          U.S. pricing benchmark

Current Use

As of 2025

Brent crude trades in the $70–80/barrel range depending on supply, demand, and geopolitical factors.

It's used by countries and companies to set contract prices for crude oil sales worldwide.

Brent crude is:

A high-quality North Sea oil

The main global price benchmark for crude oil

Critical for global trade, investment, and energy markets

Think of it as the “reference price tag” for much of the oil sold in the world.

Big Oil

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Big Oil is a name sometimes used to describe the world's six or seven largest publicly traded and investor-owned oil and gas companies, also known as supermajors.[5][6][7][8][full citation needed] The term, particularly in the United States, emphasizes their economic power and influence on politics. Big Oil is often associated with the fossil fuels lobby and also used to refer to the industry as a whole in a pejorative or derogatory manner.[9]

Sources conflict on the exact makeup of Big Oil today, though the companies which are most frequently mentioned as supermajors are ExxonMobil, Shell, TotalEnergies, BP, Chevron and Eni, with ConocoPhillips frequently being included as well prior to spinning off its downstream operations into Phillips 66. The phrase "Super-Major" emanated from a report published by Douglas Terreson of Morgan Stanley in February 1998. The report foretold a substantial consolidation phase of "Major" Oil companies which would result in a group of dominant "Super-Major" entities.[10][11][12][13] Big Oil previously referred to seven oil companies which formed the Consortium for Iran; such "Seven Sisters" were the Anglo-Persian Oil Company (a predecessor of BP), Shell plc, three of Chevron's predecessors (Standard Oil of California, Gulf Oil and Texaco), and two of ExxonMobil's predecessors (Jersey Standard and Standard Oil of New York).

The term, analogous to others such as Big Steel, Big Tech, and Big Pharma which describe industries dominated by a few giant corporations, was popularized in print from the late 1960s.[14][full citation needed][15][verification needed] Today it is often used to refer specifically to the seven supermajors.[16] The use of the term in the popular media often excludes the national producers and OPEC oil companies who have a much greater global role in setting prices than the supermajors.[17][18][19][publisher missing] China's two state-owned oil companies, Sinopec and the China National Petroleum Corporation, as well as Saudi Aramco, had greater revenues in 2022 than any investor-owned oil company.[20]

In the maritime industry, six to seven large oil companies that decide a majority of the crude oil tanker chartering business are called "Oil Majors".[21]

History

As the Seven Sisters

The expression "Seven Sisters" was coined by the head of the Italian state oil company (Eni), Enrico Mattei,[22] who sought membership for his company, but was rejected.

The history of the supermajors traces back to the seven oil companies which formed the "Consortium for Iran" cartel and dominated the global petroleum industry from the mid-1940s to the 1970s.[23][24] The Seven Sisters were:

Anglo-Persian Oil Company (BP)

Gulf Oil (Chevron)

Shell (Royal Dutch Shell)

Standard Oil of California (Chevron)

Standard Oil of New Jersey (Exxon, later ExxonMobil)

Standard Oil of New York (Mobil, later ExxonMobil)

Texaco (Chevron)

By the 1930s, the Seven Sisters dominated oil production in the world.[25] The companies owned nearly all rights to the oil in Iran, Iraq, Saudi Arabia, and the Persian Gulf.[25] The companies established jointly owned companies (such as the Iraq Petroleum Company) to legally tie their hands together, facilitate cooperation, and prevent cheating on one another.[25] The companies sought to limit the supply of oil by controlling the speed at which oil fields were developed. From the 1920s to 1940s, they had agreements not to produce oil in the Middle East unless it was in coordination with one another.[25] After the 1940s, the companies continued to collude.[25] The discovery of massive oil fields in Saudi Arabia threatened to scuttle the cartel, as control of the oil fields by two companies could undermine existing supply management schemes.[25] However, the Saudi oil production ultimately became jointly controlled by four of the seven sisters, thus making it easier to maintain coordination between the Seven Sisters.[25]

According to Jeff Colgan, the Seven Sisters faced two major problems. The first revolved around coordinating the activities of the companies so that oil prices would be kept high.[25] The second revolved around cooperation with the governments of the territories containing the oil reserves: the companies sought to minimize the taxes and royalties paid to the governments.[25] In terms of dealing with host governments, the Seven Sisters benefitted from the willingness of British and American governments to pressure and coerce the host governments.[25] The oil companies also slowed down production when taxes and royalties were increased by one host government while ramping up production in other territories with lower taxes and royalties, thus pressuring host governments to keep taxes and royalties low.[25]

Host governments faced a number of hurdles in terms of nationalizing the oil production. First, a number of oil-producing countries did not have independence and were controlled by empires. Second, great powers had installed compliant heads of state in several oil-producing countries, making those leaders reliant on the support of the great powers and unwilling to upset them. Third, a number of oil-producing countries lacked the capital and technical expertise to run the oil production, as well as needed access to North American and European markets. Fourth, oil-producing countries feared that they would be punished by Western governments and firms if they nationalized oil production (as Mohammad Mossadegh was when he nationalized the Iranian oil industry).[25]

In 1951, Iran nationalized its oil industry, previously controlled by the Anglo-Iranian Oil Company (now BP), and Iranian oil was subjected to an international embargo. In an effort to bring Iranian oil production back to international markets, the U.S. State Department suggested the creation of a consortium of major oil companies, several of which were daughter corporations of John D. Rockefeller's original Standard Oil monopoly.[26]

In 1959, the Seven Sisters reduced the price of oil for Venezuela and Middle Eastern producers, which provoked anger among oil-producing governments.[27] This prompted the oil-producing governments to take the initial steps to establish OPEC.[27] The Seven Sisters threatened the OPEC founders that they would lose market access if they went ahead with their plans.[27]

The head of the Italian state oil company (Eni), Enrico Mattei, sought membership for his company, but was rejected and since then spread the expression "Seven Sisters".[28][29] British writer Anthony Sampson took over the term when he wrote the book The Seven Sisters in 1975, to describe the oil cartel that tried its best to eliminate competitors and keep control of the world's oil resource.[30] The term for the oil cartel was further popularized, along with a fictional logo, in Mad Max 2: The Road Warrior, a 1981 post-apocalyptic dystopian action film about apocalyptic fuel shortages.[31]

Being politically influential, vertically integrated, well organized, and able to negotiate cohesively as a cartel, the Seven Sisters were initially able to exert considerable power over Third World oil producers.[28] Despite their market power, the Seven Sisters kept prices stable at moderate levels.[32] This was done to not incentivize governments in both the consumer and producer countries to impose regulations on the oil industry.[32]

1973 oil crisis

Preceding the 1973 oil crisis, the Seven Sisters controlled around 85 percent of the world's petroleum reserves.[33] In the 1970s, many countries with large reserves nationalized holdings of all major oil companies. Since then, industry dominance has shifted to the OPEC cartel and state-owned oil and gas companies in emerging-market economies, such as Saudi Aramco, Gazprom (Russia), China National Petroleum Corporation, National Iranian Oil Company, PDVSA (Venezuela), Petrobras (Brazil), and Petronas (Malaysia). In 2007, the Financial Times called these "the new Seven Sisters".[34][35] According to consulting firm PFC Energy, by 2012 only 7% of the world's known oil reserves were in countries that allowed private international companies free rein. Fully 65% were in the hands of state-owned companies.[36][37][38]

"The Era of the Super-Major"

"The Era of the Super Major" was an industry report published by Douglas Terreson of Morgan Stanley on 13 February 1998. Terreson was the top-rated Integrated Oil analyst according to Institutional Investor magazine at the time and had a broad following within the global investment community. After many years of poor industry performance by the Energy sector, Terreson suggested that business models had become obsolete, and that major strategic change was needed across the global Energy sector for value propositions to become competitive with the other parts of the market.

The premise of the report was that "a confluence of industry dynamics would conspire to produce a strategic and financial environment that was conducive to major consolidation activity in the Integrated Oil sector. Significant modifications to the strategic landscape would result, dictating competitive placement and equity market performance for years to come". The report indicated that the phase would be driven by the competitive implications of: (1) the globalization of privatized national oil companies and (2) the rising stature of specialized multinationals. Combinations were expected primarily between Major Oils which would then become "Super-Majors" which was a phrase created at Morgan Stanley in the late 1990s to denote the prototype model for success in the Integrated Oil industry as gains in globalization and scale unfolded.

Within 6 months of publication of "The Era of the Super-Major", BP and Amoco merged, representing the largest industrial combination on Wall Street at that time. The combined value of the stocks of those 2 companies rose significantly and that merger was followed by ExxonMobil, BP-Amoco-Arco, ConocoPhillips, Chevron-Texaco-Unocal, Total-Petrofina-Elf and others. The phase represented one of the largest consolidation phases in the history of the Energy sector. Corporate performance was very positive in Energy through 2007, underscoring the premise that the "Super-Major" thesis would create significant economic value for shareholders:

Exxon and Mobil merging to form ExxonMobil in 1999

Total's merger with Petrofina in 1999 and with Elf Aquitaine in 2000, with the resulting company subsequently renamed Total (now TotalEnergies)

BP's acquisitions of Amoco in 1998 and of ARCO in 2000

Chevron's merger with Texaco in 2001

Conoco and Phillips Petroleum Company merging in 2002 to form ConocoPhillips

This process of consolidation created some of the largest global corporations as defined by the Forbes Global 2000 ranking, and as of 2007 all were within the top 25. Between 2004 and 2007 the profits of the six supermajors totaled US$494.8 billion.[39] Many of these now-merged companies remain in the Fortune Global 500, with ExxonMobil ranking 12th, Total ranking 27th, BP ranking 35th, and Chevron ranking 37th in the 2022 edition of the list.[40]

Present composition

The composition of Big Oil is subject to wide debate. Nearly all accounts of Big Oil include ExxonMobil, Chevron, Shell, BP, Eni and TotalEnergies. All six of these companies are vertically integrated within the industry and operate upstream, midstream, and downstream.[10][11]

Possible inclusions

ConocoPhillips

ConocoPhillips is less frequently counted as one of the Big Oil companies due to spinning off its downstream division into Phillips 66.[12][41] Additionally, ConocoPhillips in 2022 ranked lower than any of the six major Big Oil companies on the Fortune Global 500, and its revenue was superseded by Phillips 66 in 2022.[42]

Valero

Valero Energy ranked higher on the 2022 Fortune Global 500 than Eni, though the company frequently touts that it is an independent refiner focused on midstream and downstream operations which does not have significant upstream activities.[43][44] In the media, however, Valero is sometimes called a "Big Oil" company and grouped with the other large companies.[45][46]

Influence

See also: The Power of Big Oil and 2021–2022 United States House of Representatives investigation into the fossil fuels industry

As a group, the supermajors control around 6% of global oil and gas reserves. Conversely, 88% of global oil and gas reserves are controlled by the OPEC cartel and state-owned oil companies, primarily located in the Middle East.[47] A trend of increasing influence of the OPEC cartel, state-owned oil companies[23][48] in emerging-market economies is shown and the Financial Times has used the label "The New Seven Sisters" to refer to a group of what it argues are the most influential national oil and gas companies based in countries outside of the OECD, namely CNPC, Gazprom (Russia), National Iranian Oil Company (Iran), Petrobras (Brazil), PDVSA (Venezuela), Petronas (Malaysia), and Saudi Aramco (Saudi Arabia).[49][50]

Other companies not directly involved in trading oil and gas, but still supplying accessories such as drilling, fracking and refining equipment, have also been associated with Big Oil due to their political influence. In particular, Koch Industries[51][52][53][54] and Wilks Masonry[55][56][57] have actively funded lobby groups, think tanks and media outlets aligned with Big Oil.

Maritime oil majors

In the maritime industry, a group of six companies that control the chartering of the majority of oil tankers worldwide are together referred to as "oil majors".[58] These are: Shell, BP, ExxonMobil, Chevron, TotalEnergies and ConocoPhillips.[59][60] Charter parties such as Shelltime 4 frequently mention the phrase "oil major".[61][not specific enough to verify]

Sustainable Oils

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Sustainable Oils is a renewable fuels company specializing in the research and production of Camelina, the only advanced biofuels feedstock with United States Department of Agriculture, Environmental Protection Agency, and Food and Drug Administration (FDA) regulatory approvals.[1] Oil extracted from Camelina seeds can be processed into a number of renewable products including renewable jet fuel, green diesel, biodiesel, green plastics and renewable oleochemicals.[2] The biomass that remains after oil extraction, generally referred to seedcake or meal, can be used as nutrient-rich animal feed. Camelina offers several advantages over traditional biofuel feedstocks like soy and corn, such as competitive oil yields and shorter growing seasons.[3] Sustainable Oils has its primary operations in the state of Montana and is headquartered in Great Falls.[4]

History

The Sustainable Oils research program began in 2005.[5] In 2007, Targeted Growth, Inc. and Green Earth Fuels established Sustainable Oils as a Limited Liability Company in the state of Delaware.[6]

In 2008, the company was awarded a contract by the United States Department of Defense to supply the US Navy 40,000 gallons of Camelina-based jet fuel for certification testing of alternative fuels.[7]

In early 2009, Sustainable Oils began field research operations in Chile.[8]

In March 2011, a F-22 Raptor fighter jet completed a successful test flight running on a 50% blend of Camelina fuel and traditional jet fuel. Sustainable Oils supplied all the Camelina oil for the test.[9]

In March 2013, Global Clean Energy Holdings, a Torrance, California-based biofuel feedstock company, acquired Sustainable Oils.[10]

In October 2021, Global Clean Energy Holdings announced the relocation of the Sustainable Oils headquarters to Great Falls, Montana.[4]

In November 2021, Sustainable Oils announced the purchase of 45 acres in Havre, Montana and a plan to construct a 600 thousand bushel storage and rail loading facility for its proprietary camelina grain.[11]

In November 2023, Sustainable Oils announced the advancement of camelina varieties with herbicide resistance. The company also reported 20 patented varieties of camelina and 65,000 acres of camelina growing worldwide. [12]

Research

Sustainable Oils has one of the largest Camelina research programs in the world, which began in 2005.[13] It has conducted over 140 field trials across 34 states in the continental US and six provinces of Canada. The company has established research nurseries in Montana, Arizona, and Chile.[13]

Global Clean Energy, Sustainable Oils' parent company, owns 20 proprietary and patented varieties of camelina that purport to have higher grain and oil yield and more beneficial agronomic characteristics than other strains.[14]

Supply of Camelina Oil to U.S. military

In 2008, Sustainable Oils and Honeywell signed a contract to supply the United States Defense Logistics Agency, the purchasing agency within the Department of Defense, with 40,000 gallons of Camelina-based renewable jet fuel for test flights in jets and helicopters.[7] Using a blend of 50% Camelina fuel and 50% traditional jet fuel, the Navy conducted performance trials in the F/A-18 Super Hornet,[15] F-22 Raptor,[9] and an SH-60 Seahawk Helicopter.[16] All tests were conclusively successful and each aircraft was able to perform above military standards. For example, the F-22 Raptor was able to perform a 40,000-foot supercruise and achieve speeds in excess of 1.5 Mach.[9]

Over the course of the entire testing program, Sustainable Oils supplied the military with nearly 500,000 gallons of Camelina oil.[17]

EPA approval of Camelina

In February 2013, Camelina received approval from the United States Environmental Protection Agency, qualifying its oil as an advanced biofuel feedstock or pathway under the Renewable Fuel Standard.[1] Sustainable Oils was one of multiple organizations that participated in the conversation surrounding the approval process.[18] Under the standard, every gallon of Camelina oil-based biofuel produced in the U.S. by qualified producers receives a unique Renewable Identification Number, or RIN, certifying it as a Federally approved advanced biofuel. Only fuels produced from approved pathways can be used to meet the EPA mandated minimums for advanced biofuels blending under the Renewable Fuel Standard.[1]

Acquisition

On March 14, 2013, Global Clean Energy Holdings acquired Sustainable Oils from its parent company Targeted Growth Inc. in exchange for common stock in Global Clean Energy Holdings and a promissory note.[10]

Aviation biofuel

 

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An aviation biofuel (also known as bio-jet fuel,[1] sustainable aviation fuel (SAF), or bio-aviation fuel (BAF)[2]) is a biofuel used to power aircraft. The International Air Transport Association (IATA) considers it a key element in reducing the environmental impact of aviation.[3] Aviation biofuel is used to decarbonize medium and long-haul air travel. These types of travel generate the most emissions and could extend the life of older aircraft types by lowering their carbon footprint. Synthetic paraffinic kerosene (SPK) refers to any non-petroleum-based fuel designed to replace kerosene jet fuel, which is often, but not always, made from biomass.

Biofuels are biomass-derived fuels from plants, animals, or waste; depending on which type of biomass is used, they could lower CO2 emissions by 20–98% compared to conventional jet fuel.[4] The first test flight using blended biofuel was in 2008, and in 2011, blended fuels with 50% biofuels were allowed on commercial flights. In 2023 SAF production was 600 million liters, representing 0.2% of global jet fuel use.[5] By 2024, SAF production was to increase to 1.3 billion liters (1 million tonnes), representing 0.3% of global jet fuel consumption and 11% of global renewable fuel production.[6] This increase came as major US production facilities delayed their ramp-up until 2025, having initially been expected to reach 1.9 billion liters.

Aviation biofuel can be produced from plant or animal sources such as Jatropha, algae, tallows, waste oils, palm oil, Babassu, and Camelina (bio-SPK); from solid biomass using pyrolysis processed with a Fischer–Tropsch process (FT-SPK); with an alcohol-to-jet (ATJ) process from waste fermentation; or from synthetic biology through a solar reactor. Small piston engines can be modified to burn ethanol.

Sustainable biofuels are an alternative to electrofuels.[7] Sustainable aviation fuel is certified as being sustainable by a third-party organisation[citation needed].

SAF technology faces significant challenges due to feedstock constraints. The oils and fats known as hydrotreated esters and fatty acids (Hefa), crucial for SAF production, are in limited supply as demand increases. Although advanced e-fuels technology, which combines waste CO2 with clean hydrogen, presents a promising solution, it is still under development and comes with high costs. To overcome these issues, SAF developers are exploring more readily available feedstocks such as woody biomass and agricultural and municipal waste, aiming to produce lower-carbon jet fuel more sustainably and efficiently.[8][9]

Environmental impact

Further information: Environmental impact of aviation and Biofuel § Greenhouse gas emissions

Plants absorb carbon dioxide as they grow, therefore plant-based biofuels emit only the same amount of greenhouse gases as they had previously absorbed. Biofuel production, processing, and transport, however, emit greenhouse gases, reducing the emissions savings.[2] Biofuels with the most emission savings are those derived from photosynthetic algae (98% savings) although the technology is not developed, and those from non-food crops and forest residues (91–95% savings).[2]

Jatropha oil, a non-food oil used as a biofuel, lowers CO2 emissions by 50–80% compared to Jet-A1, a kerosene-based fuel.[10] Jatropha, used for biodiesel, can thrive on marginal land where most plants produce low yields.[11][12] A life cycle assessment on jatropha estimated that biofuels could reduce greenhouse gas emissions by up to 85% if former agro-pastoral land is used, or increase emissions by up to 60% if natural woodland is converted.[13]

Palm oil cultivation is constrained by scarce land resources and its expansion to forestland causes biodiversity loss, along with direct and indirect emissions due to land-use change.[2] Neste Corporation's renewable products include a refining residue of food-grade palm oil, the oily waste skimmed from the palm oil mill's wastewater. Other Neste sources are used cooking oil from deep fryers and animal fats.[14] Neste's sustainable aviation fuel is used by Lufthansa;[15] Air France and KLM announced 2030 SAF targets in 2022[16] including multi-year purchase contracts totaling over 2.4 million tonnes of SAF from Neste, TotalEnergies, and DG Fuels.[17]

Aviation fuel from wet waste-derived feedstock ("VFA-SAF") provides an additional environmental benefit. Wet waste consists of waste from landfills, sludge from wastewater treatment plants, agricultural waste, greases, and fats. Wet waste can be converted to volatile fatty acids (VFA's), which then can be catalytically upgraded to SAF. Wet waste is a low-cost and plentiful feedstock, with the potential to replace 20% of US fossil jet fuel.[18] This lessens the need to grow crops specifically for fuel, which in itself is energy intensive and increases CO2 emissions throughout its life cycle. Wet waste feedstocks for SAF divert waste from landfills. Diversion has the potential to eliminate 17% of US methane emissions across all sectors. VFA-SAF's carbon footprint is 165% lower than fossil aviation fuel.[18] This technology is in its infancy; although start-ups are working to make this a viable solution. Alder Renewables, BioVeritas, and ChainCraft are a few organizations committed to this.

NASA has determined that 50% aviation biofuel mixture can cut particulate emissions caused by air traffic by 50–70%.[19] Biofuels do not contain sulfur compounds and thus do not emit sulfur dioxide.[citation needed]

History

See also: Aviation biofuel demonstrations

This section needs to be updated. The reason given is: Lots of plans announced years ago. No info on whether the plans were carried out.. Please help update this article to reflect recent events or newly available information. (March 2024)

The first flight using blended biofuel took place in 2008.[20] Virgin Atlantic used it fly a commercial airliner, using feedstocks such as algae.[21] Airlines representing more than 15% of the industry formed the Sustainable Aviation Fuel Users Group, with support from NGOs such as Natural Resources Defense Council and The Roundtable For Sustainable Biofuels by 2008. They pledged to develop sustainable biofuels for aviation.[22] That year, Boeing was co-chair of the Algal Biomass Organization, joined by air carriers and biofuel technology developer UOP LLC (Honeywell).[23]

In 2009, the IATA committed to achieving carbon-neutral growth by 2020, and to halve carbon emissions by 2050.[24]

In 2010, Boeing announced a target 1% of global aviation fuels by 2015.[25]

US Marine Corps AV-8B Harrier II test flight using a 50–50 biofuel blend in 2011

By June 2011, the revised Specification for Aviation Turbine Fuel Containing Synthesized Hydrocarbons (ASTM D7566) allowed commercial airlines to blend up to 50% biofuels with conventional jet fuel.[26] The safety and performance of jet fuel used in passenger flights is certified by ASTM International.[27] Biofuels were approved for commercial use after a multi-year technical review from aircraft makers, engine manufacturers and oil companies.[28] Thereafter some airlines experimented with biofuels on commercial flights.[29] As of July 2020, seven annexes to D7566 were published, including various biofuel types:[30]

Fischer-Tropsch Synthetic Paraffinic Kerosene (FT-SPK, 2009)

Hydroprocessed Esters and Fatty Acids Synthetic Paraffinic Kerosene (HEFA-SPK, 2011)

usHydroprocessed Fermented Sugars to Synthetic Isoparaffins (HFS-SIP, 2014)

Fischer-Tropsch Synthetic Paraffinic Kerosene with Aromatics (FT-SPK/A, 2015)

Alcohol to Jet Synthetic Paraffinic Kerosene (ATJ-SPK, 2016)

Catalytic Hydrothermolysis Synthesized Kerosene (CH-SK, or CHJ; 2020).

In December 2011, the FAA awarded US$7.7 million to eight companies to develop drop-in sustainable fuels, especially from alcohols, sugars, biomass, and organic matter such as pyrolysis oils, within its CAAFI and CLEEN programs.[31]

Biofuel provider Solena filed for bankruptcy in 2015.[32]

By 2015, cultivation of fatty acid methyl esters and alkenones from the algae, Isochrysis, was under research.[33]

By 2016, Thomas Brueck of Munich TU was forecasting that algaculture could provide 3–5% of jet fuel needs by 2050.[34]

In fall 2016, the International Civil Aviation Organization announced plans for multiple measures including the development and deployment of sustainable aviation fuels.[35]

Dozens of companies received hundreds of millions in venture capital from 2005 to 2012 to extract fuel oil from algae, some promising competitively-priced fuel by 2012 and production of 1 billion US gal (3.8 million m3) by 2012-2014.[36] By 2017 most companies had disappeared or changed their business plans to focus on other markets.[36]

In 2019, 0.1% of fuel was SAF:[37] The International Air Transport Association (IATA) supported the adoption of Sustainable Aviation fuel, aiming in 2019 for 2% share by 2025: 7 million m3 (1.8 billion US gal).[38][20]

In 2019, United Airlines purchased up to 10 million US gallons (38,000 m3) of SAF from World Energy over two years.[39]

In early 2021, Boeing's CEO Dave Calhoun said drop-in sustainable aviation fuels are "the only answer between now and 2050" to reduce carbon emissions.[40] In May 2021, the International Air Transport Association (IATA) set a goal for the aviation industry to achieve net-zero carbon emissions by 2050 with SAF as the key component.[41]

The 2022 Inflation Reduction Act introduced the Fueling Aviation's Sustainable Transition (FAST) Grant Program. The program provides $244.5 million in grants for SAF-related "production, transportation, blending, and storage."[42] In November, 2022, sustainable aviation fuels were a topic at COP26.[43]

As of 2023, 90% of biofuel was made from oilseed and sugarcane which are grown for this purpose only.[44]

Production

Jet fuel is a mixture of various hydrocarbons. The mixture is restricted by product requirements, for example, freezing point and smoke point. Jet fuels are sometimes classified as kerosene or naphtha-type. Kerosene-type fuels include Jet A, Jet A-1, JP-5 and JP-8. Naphtha-type jet fuels, sometimes referred to as "wide-cut" jet fuel, include Jet B and JP-4.

"Drop-in" biofuels are biofuels that are interchangeable with conventional fuels. Deriving "drop-in" jet fuel from bio-based sources is ASTM approved via two routes. ASTM has found it safe to blend in 50% SPK into regular jet fuels.[45][27] Tests have been done with blending synthetic paraffinic kerosene (SPK) in considerably higher concentrations.[46]

HEFA-SPK

Hydroprocessed Esters and Fatty Acids Synthetic Paraffinic Kerosine (HEFA-SPK) is a specific type of hydrotreated vegetable oil fuel.[2] As of 2020 this was the only mature technology[20][2][47] (but by 2024 FT-SPK was commercialized as well[48]). HEFA-SPK was approved by Altair Engineering for use in 2011.[49] HEFA-SPK is produced by the deoxygenation and hydroprocessing of the feedstock fatty acids of algae, jatropha, and camelina.[50]

Bio-SPK

This fuel uses oil extracted from plant or animal sources such as jatropha, algae, tallows, waste oils, babassu, and Camelina to produce synthetic paraffinic kerosene (bio-SPK) by cracking and hydroprocessing. Using algae to make jet fuel remains an emerging technology. Companies working on algae jet fuel include Solazyme, Honeywell UOP, Solena, Sapphire Energy, Imperium Renewables, and Aquaflow Bionomic Corporation. Universities working on algae jet fuel are Arizona State University and Cranfield University. Major investors for algae-based SPK research are Boeing, Honeywell/UOP, Air New Zealand, Continental Airlines, Japan Airlines, and General Electric.[citation needed]

FT-SPK

Processing solid biomass using pyrolysis can produce oil or gasification to produce a syngas that is processed into FT SPK (Fischer–Tropsch Synthetic Paraffinic Kerosene).[citation needed]

ATJ-SPK

The alcohol-to-jet (ATJ) pathway takes alcohols such as ethanol or butanol and de-oxygenates and processes them into jet fuels.[51] Companies such as LanzaTech have created ATJ-SPK from CO2 in flue gases.[52] The ethanol is produced from CO in the flue gases using microbes such as Clostridium autoethanogenum. In 2016 LanzaTech demonstrated its technology at Pilot scale in NZ – using Industrial waste gases from the steel industry as a feedstock.[53][54][55] Gevo developed technology to retrofit existing ethanol plants to produce isobutanol.[56] Alcohol-to-Jet Synthetic Paraffinic Kerosene (ATJ-SPK) is a proven pathway to deliver bio-based, low-carbon fuel.[citation needed]

Future production routes

Systems that use synthetic biology to create hydro-carbons are under development:

The SUN-to-LIQUID project is examining Fischer-Tropsch hydro-carbon fuels (solar kerosine) through the use of a solar reactor.[57][58][59]

Alder Fuels is proposing to convert lignocellulosic biomass (a common type of waste from forestry and agriculture) into a hydrocarbon-rich "greencrude" via pyrolysis (see: pyrolysis oil). Greencrude can be turned into fuel in refineries like crude oil.[60]

Universal Fuel Technologies is marketing its Flexiforming technology that can use different feedstocks and even the byproducts from existing renewable fuel manufacturing processes to produce SAF.[61]

Arcadia eFuels is constructing a plant that will use renewable electricity to perform electrolysis of water to produce green hydrogen coupled with CO2 capture to produce syngas and use Power-to-X gas to liquid processes to produce SAF.[62] The plant at the port of Vordingborg, Denmark is expected to begin production in 2028.[63]

Piston engines

Small piston engines can be modified to burn ethanol.[64] Swift Fuel, a biofuel alternative to avgas, was approved as a test fuel by ASTM International in December 2009.[65][66]

Technical challenges

Nitrile-based rubber materials expand in the presence of aromatic compounds found in conventional petroleum fuel. Pure biofuels without petroleum and paraffin-based additives may cause rubber seals and hoses to shrink.[67] Synthetic rubber substitutes that are not adversely affected by biofuels, such as Viton, for seals and hoses are available.[68]

The United States Air Force found harmful bacteria and fungi in their biofueled aircraft, and use pasteurization to disinfect them.[69]

Aromatics and cycloalkanes

As of May 2025 SAF is generally required to be blended with fossil fuel—because jet fuel needs cycloalkanes and aromatics, which are generally deficient in SAF; as well as the more prevalent in SAF n-alkanes and isoalkanes.[70]

Economics

In 2019 the International Energy Agency forecast SAF production should grow from 18 to 75 billion litres between 2025 and 2040, representing a 5% to 19% share of aviation fuel.[20] By 2019, fossil jet fuel production cost was $0.3-0.6 per L given a $50–100 crude oil barrel, while aviation biofuel production cost was $0.7-1.6, needing a $110–260 crude oil barrel to break-even.[20]

As of 2020 aviation biofuel was more expensive than fossil jet kerosene,[1] considering aviation taxation and subsidies at that time.[71]

As of a 2021 analysis, VFA-SAF break-even cost was $2.50/US gal ($0.66/L).[18] This number was generated considering credits and incentives at the time, such as California's LCFS (Low Carbon Fuel Standard) credits and the US Environmental Protection Agency (EPA) Renewable Fuel Standard incentives.

Sustainable aviation fuels

In 2016, Oslo Airport became the first international airport to offer sustainable aviation fuel as part of the fuel mix.

Sustainable biofuels do not use food crops, prime agricultural land or fresh water. Sustainable aviation fuel (SAF) is certified by a third-party such as the Roundtable For Sustainable Biofuels.[72]

As of 2022, some 450,000 flights had used sustainable fuels as part of the fuel mix, although such fuels were ~3x more expensive than the traditional fossil jet fuel or kerosene.[73] In 2023, SAFs account for less than 0.1% of all aviation fuels consumed.[74]

Certification

A SAF sustainability certification ensures that the product satisfies criteria focused on environmental, social, and economic "triple-bottom-line" considerations. Under many emission regulation schemes, such as the European Union Emissions Trading Scheme (EUTS), a certified SAF product may be exempted from carbon compliance liability costs.[75] This marginally improves SAF's economic competitiveness versus fossil-based fuel.[76]

The first reputable body to launch a sustainable biofuel certification system was the European-based Roundtable on Sustainable Biomaterials (RSB) NGO.[77] Leading airlines and other signatories to the Sustainable Aviation Fuel Users Group (SAFUG) pledged to support RSB as their preferred certification provider.[78][79]

Some SAF pathways procured RIN pathways under the United States's renewable fuel standard which can serve as an implicit certification if the RIN is a Q-RIN.

EU RED II Recast (2018)

Greenhouse gas emissions from sustainable fuels must be lower than those from the fuels they replace: at least 50% for production built before 5 October 2015, 60% after that date and 65% after 2021.[80] Raw materials cannot be sourced from land with high biodiversity or high carbon stocks (i.e. primary and protected forests, biodiversity-rich grasslands, wetlands and peatlands). Other sustainability issues are set out in the Governance Regulation and may be covered voluntarily.

ICAO 'CORSIA'

GHG Reduction - Criterion 1: lifecycle reductions of at least 10% compared to fossil fuel. Carbon Stock - Criterion 1: not produced from biomass obtained from land whose uses changed after 1 January 2008 from primeval forests, wetlands or peatlands, as all these lands have high carbon stocks. Criterion 2: For land use changes after 1 January 2008, (using IPCC land categories), if emissions from direct land use change (DLUC) exceed the default value of the induced land use change (ILUC), the value of the DLUC replaces the default (ILUC) value.

Global impact

As emissions trading schemes and other carbon compliance regimes emerge, certain biofuels are likely to be exempted ("zero-rated") by governments from compliance due to their closed-loop nature, if they can demonstrate appropriate credentials. For example, in the EUTS, SAFUG's proposal was accepted[81] that only fuels certified as sustainable by the RSB or similar body would be zero-rated.[82] SAFUG was formed by a group of interested airlines in 2008 under the auspices of Boeing Commercial Airplanes. Member airlines represented more than 15% of the industry, and signed a pledge to work towards SAF.[83][84]

In addition to SAF certification, the integrity of aviation biofuel producers and their products could be assessed by means such as Richard Branson's Carbon War Room,[85] or the Renewable Jet Fuels initiative.[86] The latter works with companies such as LanzaTech, SG Biofuels, AltAir, Solazyme, and Sapphire.[87][verification needed]

Along with her co-authors, Candelaria Bergero of the University of California's Earth System Science Department stated that "main challenges to scaling up such sustainable fuel production include technology costs and process efficiencies", and widespread production would undermine food security and land use.[88]

Market implementation

By 2019, Virgin Australia had fueled more than 700 flights and flown more than one million kilometers, domestic and international, using Gevo's alcohol-to-jet fuel.[89] Virgin Atlantic was working to regularly use fuel derived from the waste gases of steel mills, with LanzaTech.[90] British Airways wanted to convert household waste into jet fuel with Velocys.[90] United Airlines committed to 900 million US gal (3,400,000 m3) of sustainable aviation fuel for 10 years from Fulcrum BioEnergy (of its 4.1 billion US gal (16,000,000 m3) fuel consumption in 2018), after a $30 million investment in 2015.[90]

From 2020, Qantas planned to use a 50/50 blend of SG Preston's biofuel on its Los Angeles-Australia flights. SG Preston also planned to provide fuel to JetBlue over 10 years.[90] At its sites in Singapore, Rotterdam and Porvoo, Finland's Neste expected to improve its renewable fuel production capacity from 2.7 to 3.0 million t (6.0 to 6.6 billion lb) a year by 2020, and to increase its Singapore capacity by 1.3 million t (2.9 billion lb) to reach 4.5 million t (9.9 billion lb) in 2022 by investing €1.4 billion ($1.6 billion).[90]

By 2020, International Airlines Group had invested $400 million to convert waste into sustainable aviation fuel with Velocys.[91]

United Airlines has expanded SAF use across multiple airports worldwide, including Amsterdam in 2022,[92] San Francisco and London in 2023,[93] and Chicago O'Hare and Los Angeles in 2024.[94]

In March 2024, regular use of SAF began in the Northeastern United States at John F. Kennedy International Airport, as part of a new effort by JetBlue.[95] Southwest Airlines began using sustainable jet fuel at Chicago Midway International Airport in October 2024.[96

How Much Oil Is Left Today

 

1. What Are “Proven Reserves” and How Much is Left?

Proven oil reserves are quantities that can be extracted with current technology and under current economic conditions.

According to the Oil & Gas Journal, global proven oil reserves rose slightly to 1.755 trillion barrels by end‑2023 

That aligns with figures from environmental analysts indicating the world holds around 1.7 trillion barrels of proven reserves as of 2024 .

How Long Will This Last?

Using today’s consumption (~100 million barrels per day), those reserves equate roughly to 45–50 years of supply if consumption stayed constant .

However, this “years left” figure is dynamic. New discoveries, improved tech, and shifts in demand constantly reshape the number.

2. What Affects That Estimate?

📈 Discoveries & Technology

Advances like enhanced oil recovery and fracking constantly increase recoverable volumes 

Demand Trends

Global oil demand is flattening or nearing peak, due to EV growth, energy efficiency, and policies – especially in China, where peak demand may hit as early as 2027 .

If demand plateaus or declines, the longevity of oil reserves could exceed 50 years.

Declining Field Output

Giant oil fields are aging. Some are entering decline phases (~5–10% reduction per year) 

This makes maintaining output more expensive and technically challenging.

3. Who Holds the Most?

Here’s a breakdown of leading reserve holders (proven reserves):

Country Proven Reserves (billion barrels)

Venezuela ~300–303 

Venezuela currently holds the largest reserves, though output is hampered by economic issues 

The Middle East dominates, controlling nearly half of global reserves 

4. The Current Supply vs Demand Picture

Global production stands at about 105 million b/d, slightly exceeding demand (~103.8 million b/d in 2025).

This year is witnessing a modest supply surplus, with inventories building by ~1 million b/d since February 

The IEA projects this surplus trend continuing into the late 2020s—even jusqu’en 2030—as demand plateaus and production capacity grows 

5. Risks & Future Outlook

Geopolitical tensions (e.g., Middle East conflicts) remain a key variable, with strategic stockpiles (~1.2 billion barrels) ready for release if needed .

The IEA warns of potential “miscounting” of supply-demand balances, flagging that inventory data may be overly optimistic .

Peak demand could happen before peak supply; analysts are now predicting oil demand to hit its highest point by 2030, with consumption declining thereafter .

Final Thoughts

Yes, we still have substantial reserves—about 1.7 trillion barrels, equating to 45–50 years of current consumption.

But that doesn’t mean we’ll “run out” in 50 years—new finds, deeper resources, and tech all add to the pot.

Crucially, demand is nearing its peak due to EVs, energy policies, and efficiency—meaning oil may last longer than once expected.

Still, challenges remain: aging fields, rising costs, climate pressures, and geopolitical disruption.

In short: there's lots of oil left today—but the true question is how quickly we choose to use it. With the energy landscape shifting, the world might rely on oil for decades yet—but increasingly, cleaner alternatives are taking the lead.

Is oil expected to go up or down?

 

1. Current Baseline & Forecasts for 2025

Most major agencies forecast a continued supply surplus in 2025—driven by growing non-OPEC+ production (especially from the US, Canada, Brazil, Guyana) versus moderate demand growth 

This surplus is expected to put moderate downward pressure on prices, with average forecasts around:

EIA: Brent averaging ~$74, falling to ~$62 in H2 2025 and $59 in 2026 

Goldman Sachs: Brent trading $70–85, average $76 .

JP Morgan: Low-to-mid-$60s range 

BoA & Citi: BoA around $65–75; Citi forecasts Brent could drop to $60 by year-end 

A Reuters economist poll puts 2025 Brent average at $74.6 

Bottom line: Most call for a modest decline or stabilization around $65–75, trending lower as inventories accumulate.

2. What Could Push Prices Higher?

Geopolitical flare‑ups, especially in the Middle East: Iran threats to close the Strait of Hormuz, military action, or disruptions could spark sharp price spikes 

OPEC+ policy: While high spare capacity helps moderate prices, coordinated cuts in response to surplus could support a rebound .

3. What Could Drive Prices Lower?

Demand softness, especially in China (whose imports fell ~2% in 2024) and EV adoption suppressing fuel demand 

Rising non-OPEC+ output, particularly from US shale and other producers, outpacing demand growth .

Economic headwinds or tougher trade policies slowing consumption .

4. Volatility & Scenario Outlook

Scenario Expected Price Impact

Calm market Brent at $65–75, reflecting surplus

Moderate geopolitical tension Steady around $70–85 

Sharp Middle‑East disruption Spikes to $90–130+ possible

Analysts like Goldman Sachs expect range-bound movement unless sudden shocks occur, with mild rise then stabilization .

Morgan Stanley, OPEC+, and others anticipate a global surplus by late 2025, weighing on prices 

Final Take

Overall trend: Moderate downward or stable, as supply outpaces demand—forecasts cluster around Brent $65–75 for 2025, with lower dips possible into 2026.

Wildcards: Geopolitical tensions in the Middle East or disruptions in key chokepoints like the Strait of Hormuz could still push prices sharply higher.

Volatility: Expect fluctuations—persistent tailwinds from non-OPEC+ supply and demand trends, but geopolitics may bring sudden jumps or dips.

Budget for oil costs around $65–75/barrel through 2025—typical, but keep volatility in mind.

Monitor geopolitics for potential spikes, especially Middle East developments.

Longer-term: EV adoption and clean policies could drag demand down further, keeping prices in check.