Oil and gas companies are looking at a bonanza from the Ukraine war
Oil and gas companies are facing a potential bonanza from the Ukraine war, though few in the industry want to admit it, and many are using soaring prices and the fear of fuel shortages to cement their position with governments in ways that could have disastrous impacts on the climate crisis.
“There is a huge opportunity for oil and gas companies, though I’m sure it is not one they would have chosen,” said Robert Buckley, head of relationship development at Cornwall Insight, an energy analysis company. “They have the opportunity to reposition themselves [as crucial to policymakers]. There is going to be a very high price for oil for a very long time, and even the prospect of physical shortages.”
Oil prices have leapt dramatically, to more than $130 a barrel, sending petrol prices in the UK to more than 155p a litre, while gas prices have also surged.
Luke Sussams, of Jefferies investment bank, said: “The high-price environment is likely to last a long time. Boris Johnson has said that alongside the accelerated deployment of renewables will be greater production from the North Sea. There is the potential for growth prospects and upside [for fossil fuel producers].”
The EU, the UK and the US have all announced drastic restrictions on imports of oil and gas from Russia, which will affect the EU most as about 40% of EU gas comes from Russia, but will hurt all countries as prices are set internationally. Those governments are now urgently seeking ways to protect their energy security, through ramping up renewables and seeking alternative sources of oil and gas supply.
Opec, and Saudi Arabia in particular, are the obvious ports of call, but have been so far been reluctant to commit to increased production. This could change, as the
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