The oil market has become used to quickly recovering from geopolitical threats. Could this time be different?
Brent crude futures have jumped 8% to roughly $78 a barrel after the Iran conflict began over the weekend. There are two scenarios that could cause a more severe and lasting impact on pump prices. One is a prolonged disruption to the flow of oil tankers through the Strait of Hormuz, through which about 20 million barrels a day of oil—or a fifth of global oil production—transits. Second is serious damage to the region’s oil production or infrastructure, especially the kind that would disrupt spare capacity in Saudi Arabia and the United Arab Emirates.
The worst-case scenario is one where Iran does serious damage to neighboring countries’ oil facilities, especially the export terminals that are difficult to repair and are within striking distance of Iran’s weapons systems, according to Clayton Seigle, senior fellow at the Center for Strategic and International Studies. He estimates that this kind of damage could send oil prices higher than $130 a barrel, which was the peak after Russia’s invasion of Ukraine.
Assemblymember Anna Kelles, of Ithaca, introduced legislation last week that would require the state’s major electric utilities to create “virtual power plants” — networks of home batteries, smart thermostats, electric vehicles, and other devices that companies can draw on to keep the lights on at peak times. It aims to rapidly scale up the programs by creating new incentives for customers to participate.
The idea behind the bill is gaining traction among energy experts as states contend with rising electricity demand and soaring energy bills, as New York Focus recently reported. How a More Flexible Grid Could Save New York Billions Jack Carroll and Colin Kinniburgh
Flexible grid programs could help New Yorkers save money and cut pollution, a highly sought-after combination amid a bruising fight over the costs of achieving the state’s climate targets. A mammoth report published last fall by the state energy authority NYSERDA found that virtual power plants will be one of the key tools to achieve a reliable, zero-emissions grid, as the state’s climate law requires — and that they are cheaper and quicker to deploy than some of the other technologies the state envisions, like hydrogen or next-generation nuclear.
The price of gasoline in the United States rose only modestly on Monday, even as oil prices climbed in response to a widening conflict in the Middle East.
If the war drags on, though, that could abruptly change.
The U.S.-Israeli attacks on Iran, and Iran’s counterattacks, have started to limit the export of oil and gas from the region, pushing global oil prices higher. West Texas Intermediate crude oil futures, the domestic oil benchmark, jumped about 6 percent on Monday to just over $71 a barrel. (The international benchmark rose about 7 percent.)
But gas prices tend to take days or weeks to respond to rising oil prices as refiners pass on expenses. So a prolonged war is certain to result in higher costs at the pump.
I often hear from liberals that climate change is an immediately solvable problem, that with modest changes to our live-styles and much higher taxes on the rich, we can address the problem and have a better society for all. It’s a very hopeful message, but also a very unscientific and frankly quite naive message to boot.
If addressing climate change in the serious fashion needed to address the worse impacts on it was an easy, inexpensive to thing to do, it would have been done a long time ago. If we could just immediately switch over to cheaper, more reliable battery electric cars, and meet all our needs by a few solar panels, we’d do it now.
But the truth is switching from fossil fuels to renewable energy is much more technically challenging, and will require changes to our own lifestyles, and maybe a reduction to the human population through an expanded death penalty. It’s going to be amazingly expensive, and difficult on economy. But ignoring the problem is likely to be more expensive.
Most of that technology is getting better, thanks in a big part about government research and incentives that are pushing the market that way. But solutions aren’t cheap, nor easy, or without requiring often significant lifestyle changes. There needs to be an adult conversation, not memes and blaming the other political party for all our woes.
This is why I’ve really had little interest in Green New Deal, because I don’t think it’s serious or workable deal. Maybe it’s a message bill that will eventually get more flush on it’s bones and enacted, but as it is it won’t do much for serious problems we face today.
Oil prices surged and global stocks skidded after U.S. and Israeli strikes on Iran sparked fears of a wider conflict across the Middle East.
Oil traders scrambled to assess the extent of the disruption, including whether any traffic could still pass through the vital Strait of Hormuz. Futures for Brent crude, the global oil benchmark, jumped nearly 10%, heading toward $80 a barrel. Natural-gas futures also rallied.
The conflict threatens to upend the global oil market and send shock waves through the world economy. Brent crude has risen in recent weeks amid concerns about a potential strike on Iran
