Guyana Is the Most Exciting Story in the World Oil Market

Joe Weisenthal (0:10)

Hello, and welcome to another episode of the Odd Lots Podcast. I'm Joe Weisenthal.

Tracy Alloway (0:15)

And I'm Tracy Alloway.

Joe Weisenthal (0:16)

All right, Tracy, trivia time. You probably already know the answer.

Tracy Alloway (0:20)

I know the answer, because we talked about this yesterday before the episode.

Joe Weisenthal (0:23)

Because we know the topic. But prior, okay, prior to yesterday, had I asked you, do you know the fastest GDP growing country in the world? Would you have known the answer?

Tracy Alloway (0:34)

I 100% would have said, wait for it, Guiana.

Joe Weisenthal (0:39)

You would have really? Did you really know that?

Tracy Alloway (0:41)

No, of course not. But now that I know it, I can't lie about it.

I can't reverse engineer my lack of knowledge. Guiana, which is kind of surprising, relatively unknown South American country. People don't talk about it that much.

Joe Weisenthal (0:56)

No, people do not talk about it that much, but it is the fastest growing economy in the world. I think it was like, they had a year of like 47% GDP growth or something like that recently.

But where people are talking about Guiana a lot more specifically is in the energy industry, in the oil industry specifically, there's a lot of oil there and a lot of oil being discovered all the time. Like I think, you know, we talk about US supply a lot on the show, but outside the US, I think like almost all the oil is being discovered in Guiana these days.

Tracy Alloway (1:25)

Yeah, I actually saw a tweet in the course of this research saying that since 2015, one out of every three barrels of new oil discovered has been in Guiana. And of course, there's a lot of interest in it right now, not just because it could be a potential source of additional crude at a time when the world seems to really need some extra oil, but also because it's the sort of new player in the market, right? It hasn't necessarily declared an allegiance to any one country or any one group of oil producing nations. I'm thinking of OPEC in particular, of course. And so it's sort of like, it kind of feels like it's up for grabs.

Joe Weisenthal (2:02)

Yeah, so when we think about oil, we talk all the time about what's going on in US production.

We talk about OPEC, talk about OPEC Plus, including Russia, but here is this new entity and it potentially could be very significant. And so it raises all sorts of interesting questions. What's it gonna mean to the global oil market? And what are, you know, okay, the incredible GDP growth of Guiana right now, how sustainable is it? And what is the best prospect for the sort of oil riches to really translate into meaningful economic development for the country?

Tracy Alloway (2:34)

Right, so this is something I find very interesting because when we think of a lot of oil producing nations or we think about countries that are blessed with lots of resources, we automatically start thinking about something known as the resource curse.

So even if you have a ton of valuable things that the rest of the world really wants, it doesn't automatically translate into really good economic growth. And in fact, over the course of history, a lot of countries that have been blessed with natural resources have experienced subpar development. So the question for a country like Guyana is can it avoid the resource curse? And also in an environment where we're talking about commodity shortages, oil and gas shortages, things like that, does the resource curse still exist? Maybe things start to change now.

Joe Weisenthal (3:21)

Yeah, that's a great question. And then of course, just how successfully will the country be in developing its own resources? Because you can have theoretically abundant resources, but it takes skill and it takes some sort of basic, a certain like, there are degrees to which how well a country can exploit their own natural resources. Anyway, I'm really excited about our guest. We're going to be speaking to a historian of oil who's going to help us sort of contextualize and understand what's going on in Guiana and the oil market more broadly.

We're going to be speaking to Gregory Brew. He is a post-doctoral fellow at the Jackson School for Global Affairs at Yale University, and he is the author of two forthcoming books on oil, and we'll get to those, but let's bring him in. Gregory, thank you so much for coming on the podcast.

Gregory Brew (4:11)

Hi, Tracy. Thanks so much for having me on.