Oil Prices Surge, but a Top Energy Expert Says Markets Can Withstand the Shock – Business Insider https://share.google/H5GiJElC8soNBC8br
By Samuel O’Brient
Oil prices have spiked above $100 per barrel, causing fear in markets.
Energy economist Daniel Yergin thinks the global economy is robust enough to withstand the latest shock.
He said the disruption is historic, but the energy market is more diversified than in the past.
The US-Iran war has caused a significant disruption in the global oil market, sending prices to $100 per barrel, but one top energy expert thinks the world economy is more resilient to shocks than in the past.
S&P Global vice chair Daniel Yergin shared his take on the current oil situation in the Financial Times on Sunday. While he examined the potential for a “nightmare scenario” in oil markets, he remains cautiously optimistic that the market can weather the latest turmoil.
“This crisis is unfolding in a world in which the global oil and gas system is more resilient and diversified than it has been for decades,” he said.
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“Less than two decades ago it was the world’s largest importer of oil. Now it is the largest producer,” he added. “Just ten years ago the US exported its very first cargo of LNG. Now it is the world’s largest exporter of LNG.”
Part of the resilience that Yergin sees is due to the International Energy Agency (IEA)’s strategic oil reserves. The major oil-producing countries that make up this group, such as the US, UK, Canada, and Japan, have backup oil supplies that can effectively act as a buffer against global oil shocks.
“Right now, the world is looking at the biggest disruption in oil production in history as well as a resounding shock to global gas markets,” he stated. “The key question for global energy markets now is the duration of this explosive war.”
