Boycotting Russia? Need Oil Consider Gulf States, Iran, and More U.S. LNG/Petroleum From Shale

NIKKEIAsia March 21, 2022 14:00 JST |INTERVIEW|”Energy guru Yergin: Putin has destroyed the economy he built” “As the world heads to a scramble for oil, Iran emerges as a key alternative source.” By Ryosuke Hanafusa

Read NIKKEIAsia for all the details

Summary by 2244, Excerpts from the article based on the interview

Figure from BBC.COM

Figure from BBC.COM

Daniel Yergin, is the vice chairman of S&P Global and a leading authority on energy was interview by NIKKEIAsia

Q: “How is the Ukraine crisis affecting the energy market?

A: “There is no more ‘business as usual’ … Putin destroyed [the Russian economy] he spent 22 years building.” Putin “assumed that the dependence of Europe on Russian energy would be enough to prevent the Europeans from reacting as strongly as they did.”

Q: “The Soviets were more careful about using energy during the Cold War.”

A: The USSR position, during the Cold War, was that “our energy supplies are not political…we’re a reliable supplier.” Europeans will now react by getting more LNG, developing more internal gas supplies [North Sea] and push for renewables.

[2244 notes-these changes will take time, it is suggested by some experts that European countries may need to rely somewhat more on coal for electrical generation.]

Q:How about oil?

A: “Russian is now being unplugged or disconnected from the world economy” this applies to 7.5 million barrels of oil sent to Europe before the Russian invasion of Ukraine. It also applies to most everything else that was traded as countries and firms have pulled out.

Q: “If there is a scramble for oil, where is the alternative oil going to come from?”

A: “...Could get 2 billion barrels a day more from the Gulf countries…[and if]...there is a nuclear deal with Iran…that brings a million barrels a day of oil into the market.” U.S. ramping up production could add about “900,000 barrels a day” over a year. “Smaller volumes [also] from Canada, Brazil and Guyana.”

[2244 notes-these changes will take time, it is suggested by some experts that European countries may need to rely somewhat more on coal for electrical generation.]

Q:”What is the significance of U.S. shale in light of the Ukraine crisis?

A: [Because of the U.S.] “shale revolution [the U.S. is] self-sufficient in oil” a position America didn’t have when “it was importing 60% of its oil.”

Q:”Do the U.S. government’s environmental policies contradict the need to promote shale production?”

A: …”the big focus has been on climate. Now there is a recognition that oil and gas are really important strategically and politically…if you’re a company and going to invest, you need at least a sense of certainty as to where things are going.”