00:00Stay with that story and talk to Carol Knuckler, who's the CEO at Crystal Energy.
00:04Thank you for coming back on the program, Carol. Good to see you.
00:07So oil prices at one point, almost $120 a barrel, now dipping down just below $100.
00:13But how likely is it that we're going to see these high oil prices here to stay?
00:18Well, as long as war is ongoing in the Middle East,
00:23and as long as we see further escalation and worsening of the situation
00:27with no alternatives to getting that oil out of the region
00:31and more of the energy infrastructure in the region
00:34is being further attacked by Iranian drones and missiles,
00:39then we should be realistic and then expect prices to be in these high-level territories even worsening.
00:46So really, if you ask me how long would that take,
00:49my answer is not going to be based on economics, but it's going to be based on politics.
00:53It all depends on how far and how much worse the situation can get
00:58and how long it's going to take, and that will have a direct impact on prices.
01:03So we saw the G7 finance minister's meeting today.
01:06They decided not to release more oil reserves.
01:09But what other levers, if any, could be pulled to try and mitigate the effect
01:13that this conflict is having on oil prices?
01:15Well, first of all, we have to read between the lines from that G7 meeting.
01:20First of all, we are being told, because definitely when we saw prices jumping to almost 120
01:25or even exceeding 120 briefly earlier today, there was definitely a lot of panic in the market.
01:31So the fact that the G7 met together and discussed the potential release of the SPR,
01:36even if they did not put them in the market yet or they did not approve the release yet,
01:41they are sending some message to the market to calm the nerves.
01:44However, it also tells us that they are ready, if they believe the situation will get worse,
01:49then they are ready to step in and release those SPR to kind of compensate for some of the losses
01:54of barrels.
01:55So I read that meeting more positively.
01:58And also you can say that maybe we are not in the worst case scenario yet.
02:03What other countries can do?
02:04I mean, the most obvious thing would be to think about the demand reaction to these high prices.
02:12We've been through crisis before.
02:13It's not the first time we go through an oil crisis and high prices.
02:17But I think trying to look for efficiencies, areas where we can tame the demand growth,
02:22that would be something that can result in good action.
02:25And what you saw in Asia, some countries, perhaps they are stepping in quite rapidly
02:30to avert a full-blown crisis and putting caps here and shutting down some institutions there.
02:37But it's very important not to spread the panic across because that's the worst case scenario for prices, actually.
02:44So high oil prices, gas prices up as well.
02:47What could this actually mean for alternative energy sources?
02:50Do you think we're going to now see things like solar, wind now become the default option?
02:57It's funny because President Trump was so anti-perhaps alternative source of energy and so pro-oil and gas.
03:04But I think now he did alternative source of energy a big favor because I'm pretty sure we're going to
03:09hear more and more people reminding us
03:11that, oh, told you that oil and gas are not good for our security of supply and we need to
03:16diversify our source of energy.
03:18But is it going to change immediately the investment climate?
03:21I doubt it because, mind you, if the situation further worsens in the Middle East and continues for much longer
03:28than many perhaps had anticipated, that would drag global economic growth down
03:34and that would affect investment across the board for all energy sources, not just oil and gas versus renewable energy.
03:41Carol, great to talk to you. Thank you for coming on the program.
03:43That's Carol Neckley, CEO at Crystal Energy.
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