Iran War Strengthens the Case for Renewables and Storage
UAE Oil Production Nears Record High After OPEC Exit Leonard S.
Hyman is an economist and financial analyst specializing in the energy sector.
He headed utility equity research at a major brokerage house and… Let’s say that the Iran war has ended.
Being investors, not political pundits or military strategists, we won’t opine on who won.
Major events, however, have investment consequences.
The incontrovertible winners, on a short and long-term basis, are the engineering, infrastructure, and construction firms that repair the damage, and the munitions manufacturers that replace the equipment consumed in the war.
What about oil? Oil prices have already retreated.
Iran may rejoin the world oil market, adding to supply.
(If Putin ends the Ukraine war, that will add even more supply.) The war’s price and delivery disruptions, though, could dampen consumption over the long term just as the Oil Embargo of the 1970s did, except that consumers today have alternatives, whereas those in the 1970s just had to use less.
Today they can switch to renewables or seek supplies from new or newly revived fields outside the Persian Gulf (Guyana and Venezuela).
More supply and less demand: not a good business proposition.
US consumers remained supplied but suffered a price shock because oil sells at world prices, and US oil companies didn’t offer $70 oil to fellow Americans if they could sell it to foreigners at $110.
| Product | Price | Change |
|---|---|---|
| Brent Crude | $102.14/bbl | +0.34% |
| WTI Crude | $96.90/bbl | +0.21% |
| EN590 Diesel | $846/MT | +0.18% |
| Jet Fuel A-1 | $1090/MT | +0.55% |
| Mazut M100 | $450/MT | -0.15% |
| Bitumen 60/70 | $470/MT | +0.08% |
| Sulphur Gran 99.5% | $470/MT | -0.44% |
| Urea 46% Gran | $650/MT | +1.12% |
| NPK 16-16-16 | $460/MT | -0.28% |
| Nat Gas TTF | $15.42/MMBtu | +0.92% |
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