Climate change can impact 40% of global oil and gas reserves

More than 600 billion barrels equivalent of the world’s commercially recoverable oil and gas reserves are facing high or extreme risks due to an increase in storms and floods, rising sea levels, and temperature extremes, risk consultancy firm Verisk Maplecroft said on Thursday.

Verisk Maplecroft’s Climate Change Exposure Indices reported that Saudi Arabia, Iraq and Nigeria are the highest among the oil and gas producing countries where the risk of climate related events disrupting the flow of oil to global markets. The three countries account for nearly 19 percent of commercially recoverable oil and gas.

“These types of events are going to become more frequent and more extreme, creating even greater shocks within the industry,” wrote the firm in a note on its website.

The research found that 10.5 percent of global commercially recoverable reserves are found in areas rated as extreme risk in the Climate Change Exposure Indices, while 29.5 percent were high risk which overall amounts to around 617 billion barrels equivalent.

In 2021 alone, climate related events have affected the oil and gas industry. A freeze in Texas knocked US oil and gas output to a three-year low, while Hurricane Ida caused a record 55 spills in the Gulf of Mexico and created historic disruptions to the supply of both crude oil and refined products.

Meanwhile the record heat in Russia increased the melting of permafrost, which damaged 40 percent of buildings and infrastructure in northern regions which rely heavily on oil and gas production.