“We don’t set the price of oil; the market does.” – Total CEO

Patrick Pouyanné, Chairman of the Board and Chief Executive Officer at Total, a global integrated energy producer and provider, a leading international oil and gas company, and a major player in low-carbon energies.

A graduate of École Polytechnique and an Engineer of the French Corps des Mines, Patrick Pouyanné held various positions in the French Industry Ministry and in ministerial offices from 1989 to 1996, including Environment and Industry Technical Advisor to the Prime minister from 1993 to 1995 and Chief of Staff to the Information Technology and Space minister from 1995 to 1996.

He joined Total in January 1997, where he held various positions until he was appointed Chief Executive Officer and President of the Executive Committee in 2014. On May 29, 2015, he was elected as Member of the Board of Directors of Total.

On December 16, 2015, Total’s board of directors appointed Patrick Pouyanné as Chairman of the Board and Chief Executive Officer of Total.

Patrick Pouyanné posted his views on oil prices in his latest LinkedIn article.


The energy sector has little idea of how the price of oil will behave. In just a few years, economic theories went from predicting that oil would never again fall under the $100 mark to forecasting that prices would stay flat at $60 for the long term. In the three years from 2014 to 2016, the price of oil plunged from $100 to an unsustainable — for producing countries — low of $40. Neither Russia nor the Gulf states were able to balance their budgets. Prices then yo-yoed between $45 and $65 a barrel throughout 2017 before recently hitting $80. Brent has rebounded strongly due to a combination of factors:

  • Strong demand growth driven by low prices and a more buoyant global economic growth. Demand has risen by more than 5 million barrels per day over the last three years, double the increase over the three years before that.
  • Production disruptions in two major producing countries, Libya and Venezuela, which experienced a sharp drop in 2017.
  • A coordinated production policy between the Organization of the Petroleum Exporting Countries (OPEC) — in particular Saudi Arabia — and non-members, especially Russia. At its meeting in Vienna in late June, the so-called OPEC+ group approved a production increase that would partly offset shortfalls when countries cannot meet their quotas. So far, prices have not dropped significantly, chiefly due to other events affecting supply.
  • Geopolitical tensions in the Middle East, aggravated by the recent U.S. withdrawal from the Iran nuclear deal.

As a result of all this, global stocks are declining — but are still high in terms of days of consumption compared to pre-slump levels. In the medium term, the greater uncertainty stems from the pace and scale of the increase in shale oil production in the United States, currently driven by higher oil prices. Yet it, too, faces constraints related to oil and gas transportation infrastructure.

However, the additional supply will be negated in part by the acute drop in investment by the industry in recent years, which will impact supply in the medium term, pushing prices up again.

All these factors seem to indicate that prices could remain relatively high. But recent history counsels caution. As I keep repeating, we don’t set the price of oil; the market does.

For the time being, the market is close to balanced, with both supply and demand forecast to average almost 99 million barrels per day in 2018. Though in the short term at least, I believe that prices will continue to be volatile — a fact of life for any major global commodity.

In this environment, Total aims to be profitable regardless of where the price of oil stands. So the question is, how can we protect ourselves against price fluctuations, something over which we have no control? For some answers, read his earlier post on this subject on LinkedIn.

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