OPEC + – the Organization of the Petroleum Exporting Countries, along with its allies including Russia – has come under pressure from major consumers, such as the United States and India, to add additional supplies after prices of oil increased by 50% this year.
However, the oil cartel agreed on Monday to stick to an existing pact to increase oil production by 400,000 barrels per day (bpd) in November, ignoring calls to pump more oil.
” What I think [is] more worrying for everyone… what happens during the winter? Are we going to have another frost in the Arctic? Driscoll told CNBC’s “Squawk Box Asia” Tuesday.
He pointed to the fuel shortage in the UK – with long lines of cars waiting to buy petrol, as well as “fights”. In the UK, people panicked while buying fuel, causing shortages and straining fuel supply chains.
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Driscoll said what’s particularly concerning is thin inventory, or if there is “any kind of supply chain problem.”
Supply chains have been strained by the fuel-buying panic in Britain and is partly due to a significant shortage of truck drivers due to Brexit and the UK’s new trade relationship with the ‘EU. This led the UK to resort to the military to deliver fuel.
Oil prices hit a three-year high after OPEC + decision. Brent was at $ 82.47 a barrel Wednesday morning during Asian hours, and WTI was at $ 78.84.
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“I see this as a kind of lower probability scenario. That is, if everything goes wrong, if we have arctic weather conditions, if we have problems, breakdowns in deliverability, supply chains. It’s a possible scenario but I don’t see it as likely to be sustainable, ”he said.
Driscoll also highlighted the energy crisis in China, which led to widespread disruption when local authorities ordered power cuts to many factories.
In Europe, the region is also grappling with its own energy crisis with a massive gas shortage.
This confluence of crises leading to gas shortages is expected to boost demand for oil ahead of what is expected to be a colder winter, analysts have warned.
– CNBC’s Sam Meredith and Chloe Taylor contributed to this report.