The scenarios for a surge in oil prices are nightmarish, at a time when there are fears of an energy crisis and an economic recession.
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“Unfortunately, the outlook is grim, because we see that at least the calculations made by Trump’s team have proven incorrect,” said Dr. Konstantinos Hatzistassou, Professor (Department of Energy) at the University of Nicosia, speaking on the Alpha Kalimera program.
“After the Houthis attacked Saudi Aramco’s oil facilities and the East-West pipeline, operations have ceased, 4 million barrels of crude oil per day have been removed from the market—oil that Saudi Arabia exported via the Red Sea, mainly to Asian markets— which has sent shockwaves through the markets and led to price hikes—that is, an increase in crude oil prices and, consequently, an increase in fuel prices.”
“Things could get even more difficult, because, at least at the moment, there isn’t enough crude oil being supplied to the markets,” he adds.
“Estimates suggest that if this crisis drags on—since at this point, not only have European countries’ reserves been largely depleted, but China’s are also beginning to dwindle— Exports from Russia have stopped because Ukraine is also striking oil facilities. Therefore, it is estimated that the price of diesel fuel may rise to 2–2.5, roughly from 2.20 to 2.80 euros per liter.”
Mr. Hatzistassou emphasizes that this is a nightmare scenario, as it will have a domino effect.
“So, the outlook remains grim at this point, and it seems that things are getting even more difficult because we see that no diplomatic efforts are underway at the moment.”
He notes that the price of natural gas has also doubled compared to before the hostilities began.
“So it seems that things there will be difficult, and winter will be even harder.”
Regarding the possibility of taking measures, Mr. Hatzistassou notes that the European Commission states that subsidies and tax breaks must be regulated, and that measures should be targeted; however, the impact is universal, affecting both businesses and households regardless of income.
“There is this subsidy of 8.3 cents per liter, which the government has in place until November 30, but the problem is that it’s not enough, because the constant price hikes have more than offset this reduction.”
Mr. Hatzistassou also notes that, depending on developments and attacks on energy infrastructure, there are fears of an energy crisis and an economic recession.
