Geopolitics and the economy: How war-triggered oil price shock was largely avoided
Dire predictions about possible catastrophic impacts of the Iran conflict on oil prices – and thus on the global economy – appear to have largely proven unfounded. Thijs Van de Graaf, Professor of International Energy Politics at Ghent University, talks with Daniel Morris, Chief Market Strategist, about the range of factors that have mitigated the effects of the war.
With oil at $60 a barrel when the crisis erupted, there was actually oversupply. Some Gulf countries shipped oil out via pipelines, bypassing the blocked Strait of Hormuz. Western governments released strategic oil stocks, and China reduced its oil imports by almost three million barrels a day. However, there could be longer-term consequences for both the supply of and demand for oil. “Increased production could result in an oil glut, and there are signs of a significant move away from fossil fuels towards electrification, renewables and nuclear.”
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