According to reports, Bjarne Schieldrop, Chief Commodities Analyst, at Swedish Bank SEB Group has indicated that the price of oil can go as high as $200 per barrel. This comes as stockpiles worldwide are shrinking while production remains stagnant.
Oil prices climbed to as high as $127/bbl at the start of the Russian invasion of Ukraine, then returned to $97/bbl a few weeks into the war. Since then, the price of oil has been on a steady upward climb, being pushed on by reduced stockpiles and lower production levels. Covid lockdowns in the major Chinese cities of Shanghai and Shenzhen have done little to lower the price of oil.
Though the war in Ukraine and the ending of Covid lockdowns have caused a recent spike in oil prices, oil prices have been steadily rising since 2020. The steady rise is mainly the result of a slowdown in investment to develop new oil fields. Analysts have pointed to the price crash of 2020 which left many US fracking companies bankrupt as the primary reason why investors are reluctant to invest in new projects.
Adding to the pressure, the global push to renewable energy such as solar and wind combined with the growing acceptance of electric vehicles has left the oil industry falling behind competing energy sub-sectors in the battle to attract new investment. Ironically the rise of renewable energy is now among the primary factors pushing the constant increase in oil prices.
In this environment, the rapid investment in developing the Guyana-Suriname oil basin might just become the last oil boom.
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