Where are oil and gas prices heading towards?
If you live in Europe could the cost of petrol be about to go up at your local forecourt?
The prognoses of the price of #oil and #gas would be different depending on what part of the world you are in. However, it seems like it would be a challenging situation overall.
#costofliving #economy #crisis #politics
The prognoses of the price of #oil and #gas would be different depending on what part of the world you are in. However, it seems like it would be a challenging situation overall.
#costofliving #economy #crisis #politics
Transcript
00:00 First of all, I think on the actual oil price itself, whenever there is a crisis of this kind,
00:06 oil prices tend to shoot up quickly and then settle afterwards. I don't think that it will
00:13 have a long-lasting significant impact on the oil price. We have to remember that the one region of
00:20 the world that's really hit by this crisis in the Red Sea is Europe. So Asia is going to be able to
00:29 get its crude oil and its products and its natural gas as usual. The US doesn't buy very much from
00:36 the Middle East, so it's really an impact on Europeans. And it means that their supply lines
00:43 are now much, much longer than they were when the oil could just come up through the Suez Canal.
00:48 And I think this is going to create a lot of challenges in shipping. Some companies are going
00:56 to find that they have lower inventories than they thought they would. So it will have an impact
01:04 on those refiners in the European area and also on shipping costs, because we need to ship all
01:12 the way around Africa rather than the much shorter route. Okay, so it's really focused on Europe. Are
01:19 there any countries in particular that are most affected? And you mentioned shipping around Africa.
01:25 Are there other solutions that countries are looking at to get those ships or other forms
01:30 of transport to get the oil that they need? Well, there are obviously other sources of crude
01:37 available, but Europe now is not buying any crude from Russia. And Russia was a very big supplier
01:46 of crude oil to the European market. Now that crude actually has to go the other way.
01:52 And it too can't go through the Suez. It's going to have to go through Africa.
01:56 So that's one that's taken away from the table. Other crudes such as Kazakh crude, I guess,
02:03 are being used or North African are being used as much as they can anyway because of the Russian
02:08 situation. So I just think that they're going to have to deal with bringing this crude from further
02:15 away. The Mediterranean region in particular, I think, will be more heavily hit because the
02:22 refineries in the Mediterranean rely more on Middle Eastern crude than the ones up in the
02:26 northwest of Europe. And you said that you don't see a long lasting impact on oil prices. But what
02:34 do you think is going to happen in the short term? What's going to happen when the markets open
02:37 tomorrow? The oil price may go up a little bit more. I don't expect very much more.
02:46 We are in a market where oil prices have been declining. The market appears to be well supplied
02:54 in general. So in that kind of market, even these impacts don't really push the price up that much.
03:00 If we are in a much tighter market, maybe that would be different. I do think, though,
03:04 that the price of diesel is going to go up a lot in the European market. Europe used to get most
03:10 of its imports of diesel from Russia. It's currently getting a lot more diesel from east
03:16 of Suez, from the Middle East, from India, even from as far away as China. And so European diesel
03:24 supply chains are going to be very impacted. And I think it has more impact on diesel prices than
03:29 it does on oil prices.