RT.com
17 Nov 2023, 04:14 GMT+10
The potential spread of the Israel-Hamas conflict threatens global oil supplies, the CEO of the energy services firm has said
Growing global uncertainty amid the conflicts in Ukraine and the Middle East could have a negative impact on the world's oil and LNG supply, Lorenzo Simonelli, chief executive of Baker Hughes, told the Financial Times this week.
According to Simonelli, the rising instability could have similar economic consequences as the 'Oil Shock' crisis of 1973-74. During that period, the world saw skyrocketing energy prices and fuel shortages after Arab oil-producing nations imposed an embargo in response to Washington's support for Israel in the Yom Kippur War. The price of a barrel of oil nearly quadrupled in less than a year, adding to the factors that caused a decade of high inflation and stagflation in the US during the 1970s.
"From a historical context I've heard people say, you go back to the oil embargo of 1973 - that being somewhat similar," Simonelli said. "But in my tenure, no [the geopolitical climate has not been this fragile - FT]. This is, from a political standpoint, very fluid."
The Baker Hughes CEO pointed out that the Israel-Hamas conflict had not "changed the outlook" for oil supply or demand as Israel is not a significant producer of crude. However, according to experts cited by the FT, a major intervention by Iran could drive up prices. "Base case is that this is hopefully contained within the situation that it is currently - sad as it is - and things continue to be tight. But clearly, if there's a worsening and deterioration and an escalation of the situation, things will change," Simonelli argued.
Baker Hughes is a leading supplier of liquified natural gas equipment, and Simonelli highlighted that the company had a large number of LNG contracts. He claimed that Russian pipeline gas had little prospect of re-emerging in the short term as a competitor to LNG, even if the conflict in Ukraine ends. "I think Europe has been shown the difficulties of being so dependent on one energy source," he said.
According to Simonelli, a warm winter last year and efforts by the EU to build up stocks have helped to avoid a reoccurrence of the 2021 energy crisis, when gas prices in the region spiked over €300 ($320) per megawatt hour amid the bloc's decision to shift away from Russian supplies.
"There is a slight sigh of relief right now, because it seems still like a relatively mild winter at this moment. But if there's a serious winter, it's still going to have an impact on Europe," said the CEO.
Simonelli noted that the buildup of LNG projects on the US Gulf Coast would continue as American exporters look to meet booming demand from the EU.
For more stories on economy & finance visit RT's business section
(RT.com)
Get a daily dose of Orlando Echo news through our daily email, its complimentary and keeps you fully up to date with world and business news as well.
Publish news of your business, community or sports group, personnel appointments, major event and more by submitting a news release to Orlando Echo.
More InformationIn a devastating turn of events, Israel's war on Gaza, sparked by Hamas's unprecedented attacks on October 7, has resulted ...
BATON ROUGE, Louisiana: In a Louisiana election where more than 43,000 people cast their ballots, a candidate for parish sheriff ...
LIVINGSTON, Kentucky: This week, railroad operator CSX said a train derailment involving 16 cars, two of which spilled molten sulfur ...
Fifty-seven journalists have been killed as of Saturday as a result of Israel's war on Gaza, which has extended to ...
TEL AVIV, Israel - Following Taoiseach Leo Varadkar's statement on Emily Hand's release, Israel's foreign minister says he summoned the ...
WASHINGTON D.C.: The White House says U.S. authorities have foiled a plot to kill a Sikh separatist in the U.S., ...
MARSHALL, Texas: In a lawsuit unsealed this week, Texas Attorney-General Ken Paxton said Pfizer and its supplier Tris Pharma provided ...
(Photo credit: Jordan Prather-USA TODAY Sports) Freshman reserve Reed Sheppard was outstanding on both sides of the floor with 21 ...
(Photo credit: Perry Nelson-USA TODAY Sports) Connor McDavid continued his hot streak with a goal and two assists and also ...
(Photo credit: Sergio Estrada-USA TODAY Sports) Malik Monk banked in a tough 13-footer with 7.4 seconds left, Stephen Curry was ...
(Photo credit: Sergio Estrada-USA TODAY Sports) The Sacramento Kings, who rallied from a 24-point deficit on Tuesday to complete a ...
(Photo credit: Orlando Ramirez-USA TODAY Sports) After splitting a pair of games against high-profile opponents in San Diego last week, ...