Collapsing Venezuelan oil exports push oil price to $78, highest level since the big price drop in 2014

With Iranian exports soon to be hit by Trump sanctions, some analysts predict $100 oil again. Energy stock prices are surging.

Now a big test begins for the oil and gas industry, I think If they stick to their old business models, lose what the pundits call their “capital discipline”, and start placing big capital-expenditure bets on projects that will require long-running high oil prices to pay back, they risk wasting capital and stranding assets. If they don’t invest capex in new exploration and production, $100+ oil becomes probable ….which will make renewable energy and electric vehicles even more attractive. They are, in other words, between a rock and a hard place. Better to hike the capex investments in renewables and EV infrastructure and be done with it? An organised retreat from the old, broken, business models, in other words. Like many big utilities have done.

Image: from the first of the two FT articles quoted

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