Impact of geopolitics and elections on global oil markets

In this interview given to Rotus Oddiri from Arise News, Dr. Carole Nakhle, CEO of Crystol Energy, discusses the impact of the geopolitical tensions in the Red Sea and 2024 elections on global oil markets. 

Dr Carole Nakhle discusses the impact of the geopolitical tensions in the Red Sea and 2024 elections on global oil markets in this interview with Arise News

Key takeaways:

– The Red Sea is an important passage for global trade including oil and Liquified Natural Gas (LNG) and thus any disruptions via this route ought to impact global trade.

– However, current oil prices do not convey a concerning situation, primarily because no losses of supplies have actually occurred and there are alternatives to the Red Sea even if they require longer journey.

– The fears of supply losses are countered by two main forces. First, OPEC+ spare capacity is high enough to create some safety margin in the market. Second, key players don’t have appetite for widening the conflict especially when many countries, including the US, will be having elections this year.

– No candidate has won a presidential race by promising high energy prices. Often, it is the opposite. In the US for instance, the president’s approval rate at the gasoline price at the pump are inversely correlated. When the latter goes up, the president’s approval rates dwindle.

– The growth potential for Electric Vehicles (EVs) is higher compared to conventional fossil-fuel cars given that it is starting from a low base. Automotive manufacturers are thus set to take leverage of that growth in the medium to longer term. 

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