Could An Energy Crunch Lead To A Worldwide Financial Crisis?

By Paul Homewood

 image

https://oilprice.com/Energy/Crude-Oil/Could-An-Energy-Crunch-Lead-To-A-Worldwide-Financial-Crisis.html

This is a long technical article, but I wanted to draw attention to this graph:

 

As the report explains, there are a number of reasons for this drop in CAPEX. Certainly the oil glut a few years ago discouraged capital spend, with oil companies preferring to use surplus cash in share buy backs.

But in a properly functioning market place, the current high oil price should be incentivising new drilling.

But as the article notes, there are all sorts of political pressures being exerted to stop that. State regulatory control, green activist groups, threats of carbon taxes, subsidies and mandates for renewables, legal actions, threats to sue oil companies and long term Net Zero targets.

All in all, who would want to invest billions now when there might be no business in a couple of decades time?

Under these circumstances, global oil and gas supply will remain tight for years to come, as demand remains stubbornly high,  and prices, I suspect, have a lot higher to go yet.

via NOT A LOT OF PEOPLE KNOW THAT

https://ift.tt/3nBQ2ai

November 20, 2021 at 04:36AM

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s