AI could lower oil prices over the next decade | Microsoft/generative ai github | Generative ai advantages and disadvantages | Generative ai google login | Turtles AI

AI could have a significant impact on the oil market over the next decade, according to an analysis by Goldman Sachs. AI’s ability to improve efficiency in logistics and extraction could lead to lower production costs, impacting oil prices and affecting revenues for producing countries. However, the precise implications remain uncertain.

Key points:

• Logistics efficiency: AI can optimize the oil supply chain, reducing operational costs.
• Production costs: Possible reduction of up to 30 percent for new shale wells through automation and advanced data analytics.
• Supply and reserves: Increased recovery of oil reserves by up to 20% in shale fields.
• Oil Price: Potential $5/barrel drop in marginal price, with significant impact on global markets.

According to Goldman Sachs, AI could put downward pressure on oil prices over the next decade due to its ability to increase supply and reduce costs through more efficient management of logistics and extraction. The report points out that AI could lead to up to a 30 percent reduction in the cost of opening new shale wells and improve the amount of recoverable resources. This would result in a possible increase in global oil reserves, particularly in the United States, where the adoption of AI could increase recovery rates in shale fields by up to 20 percent. This scenario would result in an estimated $5/barrel drop in the marginal incentive price, a figure that Goldman Sachs says could exceed the expected increase in demand due to AI expansion, which could affect electricity and natural gas demand more significantly than oil demand. Nevertheless, the overall effect on oil prices in the medium to long term could be limited, with an estimated change of around $2/barrel in response to increased demand. This development could have considerable economic repercussions, particularly for oil-exporting countries, such as those that are members of OPEC+, which could see their revenues reduced by lower prices. At the same time, U.S. technology companies are already investing in energy to support their expanding data centers, an area where energy demand is growing exponentially. However, Goldman Sachs’ forecast, while robust, does not rule out margins of uncertainty regarding the actual scope of AI in the energy sector.

The pressure exerted by technological innovation could therefore change the dynamics of the oil market in ways that are not entirely predictable.