Oil's Lost Decade Is About to Be Repeated
For as long as most of us can remember, a rule of thumb has held true: Every year, the world's production of oil goes up by one million barrels a day.
In 1983, the figure stood at 56.6 million barrels. In 2023, 40 years later, it was 40 million barrels more: 96.3 million. Annual figures may jump around thanks to wars, recessions, and the rise and fall of economies, but averaged over the longer term, every decade we've added an extra 10 million daily barrels to the headline total.
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CNBC
37 minutes ago
- CNBC
An Israeli attack on Iran could send oil prices above $100 as tensions mount
Beset by near-universal bearish outlooks just a month ago, oil prices could spike to more than $100 a barrel in the event of an Israeli attack on Iran, some analysts are warning. Crude prices spiked as much as 5% overnight — before paring gains — on fears of military escalation between Iran and Israel as President Donald Trump announced the withdrawal of some U.S. personnel from embassies and bases across the Middle East. The front-month August contract for global benchmark Brent crude was trading at $69 per barrel at 3:20 p.m. ET on Thursday, while the front-month July U.S. WTI contract was at $67.7 per barrel. "They [U.S. military personnel] are being moved out because it could be a dangerous place and we will see what happens... We have given notice to move out," Trump told reporters on Wednesday. The Pentagon has ordered the withdrawal of troops and non-essential staff from embassies in Baghdad, Kuwait and Bahrain. The jury is still out as to whether the moves are a pressure play ahead of upcoming U.S.-Iran nuclear talks, or whether the U.S., Israel and Iran are truly on the verge of conflict. The geopolitical risk premium is "already at least partially reflected in current oil prices," according to J.P. Morgan's global commodities research team, citing Brent crude trading at just under $70 a barrel, already above its model-derived fair value figure of $66 for June. "This suggests an elevated 7% probability of a worst-case scenario, where the price reaction is exponential rather than linear, with the impact on supply potentially extending beyond a 2.1 mbd (million barrels per day) reduction in Iranian oil exports," the bank's research team wrote in a note published Thursday. Iran is OPEC's third-largest crude producer. Israel appears ready to attack Iran, according to reports citing U.S. and European officials, and Israeli Prime Minister Benjamin Netanyahu has been pressing Trump to allow strikes. But the American president said in late May that he had warned Netanyahu against attacking Iran while negotiations with Washington were under way. U.S. Middle East envoy Steve Witkoff is currently set to meet with Iranian Foreign Minister Abbas Araghchi in Oman on Sunday for a sixth round of negotiations. Strait of Hormuz in focus Oil traders are focusing on the potential of a wider conflict shutting down the Strait of Hormuz, a critical chokepoint through which 20% of the volume of the world's total oil consumption passes daily. The British Navy on Wednesday issued a rare warning to ships in the region, saying it had "been made aware of increased tensions within the region which could lead to an escalation of military activity having a direct impact on mariners." It urged caution for vessels transiting "the Arabian Gulf, Gulf of Oman and Straits of Hormuz." Beyond that, J.P. Morgan warned, "a more general Middle East conflagration could ignite retaliatory responses from major oil producing countries in the region responsible for a third of global oil output." "Under this severe outcome," the bank's analysts wrote, "we estimate oil prices could surge to the $120-130/bbl range." Even before the latest uptick in tensions, some oil industry watchers were already making bullish calls despite a flood of announced OPEC+ supply coming onto the market, and lower global growth and demand forecasts due to trade and tariff tensions. Josh Young, founder and chief investment officer at Houston-based Bison Interests, told CNBC in late May that physical markets are more tightly supplied than previously thought, and with several oil rigs in the U.S. shale patch coming offline just as the U.S. summer driving season begins, markets should be preparing for Brent crude at $85 a barrel. "The pure inventory versus consumption would indicate $85 [per barrel], which is way higher than where we are right now. It's almost uncomfortable to say that, but that's the current price implied by inventories," Young told CNBC's Access Middle East. He cited his forecast figure as "fair value," arguing that "typically, you go from too cheap to too expensive. So I don't think we should be ruling out $100 oil this year. And I think if there is a geopolitical risk, it could get even higher." Without the geopolitical risk premium — namely, a conflict with Iran — Young still sees crude coming up to the $80 to $85 per barrel range, particularly in the event of trade deals being reached and Trump's tariffs being lowered. The outlook is boosted by this month's forecast from the U.S. Energy Information Administration, which sees a decline in U.S. oil production for the first time since the Covid-19 pandemic due to slower drilling activity and a declining rig count. Such bullish forecasts are certainly not the norm, however. Without a military attack on Iran, J.P. Morgan's base case for oil "remains in the low-to-mid $60s oil for the remainder of 2025, and $60 in 2026." Goldman Sachs also maintains an oil price forecast in the $50 to $60 per barrel range for this and next year, despite noting an improving demand picture, downside risks to U.S. supply and geopolitical tensions. The recent rise in inventories due to OPEC+ output increases, "supports our cautious oil price forecast, with Brent expected to average $60 for the rest of 2025 and $56 in 2026," the bank's commodities team wrote. "However, small misses in OPEC+ supply suggest that lower-than-anticipated spare capacity represents an upside risk to our price forecast."
CBS News
44 minutes ago
- CBS News
Trump to attend energy and innovation summit in Pittsburgh
President Trump will visit Pittsburgh to attend the inaugural Pennsylvania Energy and Innovation Summit next month. Pennsylvania U.S. Sen. Dave McCormick is spearheading the summit at Carnegie Mellon University on July 15. McCormick's office announced that Mr. Trump will attend the summit, which will bring together leaders in energy and artificial intelligence as well as investors, labor and trade leaders and government officials. Mr. Trump just visited Pittsburgh at the end of May to talk about the U.S. Steel-Nippon deal and announce tariffs. "There's no question that the path to American energy dominance runs directly through Pennsylvania, and this Summit will celebrate all our Commonwealth has to offer," McCormick said in a news release. "Harnessing Pennsylvania's unique strengths to attract new data center investment and energy infrastructure development will jumpstart Pennsylvania's economy, create great, new jobs, and bolster our national security." The news comes after the Shapiro administration on Monday announced that Amazon will pump $20 billion into Pennsylvania to create high-tech cloud computing and artificial intelligence innovation campuses. Gov. Josh Shapiro said it's the largest private sector investment in the commonwealth's history. McCormick says that Pennsylvania's natural gas resources, skilled workforce, access to water and research institutions make the state "a logical base" to power America's technological future. "The Pennsylvania Energy and Innovation Summit will align the leading energy companies, the most innovative AI platforms, global investors, and labor and trades behind President Trump's agenda to unleash American energy potential. Together, we can usher in a new age of energy production and power the AI and technological revolution. I am grateful to President Trump for announcing he will join us in Pittsburgh," McCormick said in the news release.
Bloomberg
an hour ago
- Bloomberg
From Lagging Indicators to Daily Intelligence: Rethinking Country Risk
From armed conflict to political upheaval, geopolitical events are unfolding daily - and they're directly impacting investments and counterparties in these locations. Yet most traditional country risk metrics are produced infrequently on a lag, leading many firms to rely on manual monitoring of news and social media. Join Bloomberg and Seerist as we introduce a newly launched dataset that replaces guesswork with grounded, daily intelligence. Powered by expert political analyst insight and AI, this data delivers country-level geopolitical risk scores and ratings tied directly to companies' country of risk - enabling risk and investment teams to monitor how fast-moving developments are impacting businesses on the ground. Whether you're comparing counterparties or recalibrating investment decisions, this session will show how to seamlessly integrate geopolitical risk data into your workflow - so you're not only aware of global events as they unfold, but able to confidently quantify their impact. Global Head of Risk & Investment Analytics Products Bloomberg Zane Van Dusen is the Global Head of Risk & Investment Analytics Products at Bloomberg. Zane began this role in 2019 and under his leadership, the group has become one of the industry's top data analytics providers, supplying innovative risk metrics, such as Bloomberg's award-winning Liquidity Assessment solution (LQA), based on Bloomberg's vast database of market data. Zane works with quants and engineers to build data-driven analytics that address a wide range of client needs from investment research to portfolio construction to regulatory reporting. Prior to this role, Zane managed the implementation of risk management, stress testing and reporting systems for Credit Suisse's Treasury and Liquidity Risk Management groups for over a decade. Prior to this role, Zane managed the implementation of risk management, stress testing and reporting systems for Credit Suisse's Treasury and Liquidity Risk Management groups for over a decade. Victoria Cardwell Head of Sales Seerist Victoria Cardwell brings two decades of experience at the intersection of geopolitical risk and commercial strategy. At Seerist, she leads sales to commercial and international government entities who need to monitor, analyse and anticipate security, political and operational risks. Throughout her career, Victoria has built and scaled teams to support clients across a broad range of sectors—including finance, insurance, energy, technology, and manufacturing—helping them navigate volatile environments by building risk intelligence technology into their operations. Victoria spent 8 years at Control Risks as Partner of Global Online Solutions, and previously held roles include at Jane's and IHS Markit (now S+P). Throughout her career she has focused on delivering intelligence as SaaS, for macro-economic as well as geopolitical and security datasets. Victoria holds a Master's degree in War Studies from King's College London and studied at Durham University.
