Not a single oil confrontation has yet ended quickly – this must be prepared now.
This was told by an analyst with the Bloomberg Energy Agency, Javier Blas.
The expert recalled that over the past 35 years the world has survived three oil wars. The experience of those events reveals two key points: all oil wars lasted at least a year, and energy prices fell at least 2 times. At the same time, Blas noted the peculiarity of the fourth oil war, which began in 2020. According to him, the decline in demand has never coincided with the growth of supply.
First oil war
In the summer of 1985, the Saudi king informed members of the Organization of Petroleum Exporting Countries that Riyadh did not intend to unilaterally limit production. In the fall, Saudi oil flooded the market, dropping prices from 31 to 9.75 dollars per barrel for six months. Then the confrontation lasted thirteen months.
Second oil war
November 1997 was marked by the beginning of a new price confrontation in the energy market. In an attempt to crush Venezuela, Saudi Arabia increased oil production. The catastrophe began in the winter, when it turned out that cold weather was not worth the wait. As a result, oil collapsed by more than 50 percent, reaching $ 10 per barrel. It was possible to resolve the situation only after seventeen months.
Third oil war
Once again, Saudi Arabia began to increase oil production in the fall of 2014. Riyadh explained this decision by two factors. First, the Saudis were worried about the American shale revolution. Secondly, oil producers who are not members of OPEC avoided commitments to reduce production. As a result, with the initial cost of raw materials at $ 100 per barrel, prices fell to about $ 28. This struggle was the most protracted, lasting almost 2 years.US bombers checked flights over the UK