In recent statements, the Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, warned that high energy prices could persist for some time, even after the end of the conflict in the Middle East.

The global energy market has experienced ups and downs since the conflict with Iran erupted. The agreements with the United States, which have been broken and only fragilely reinstated, do not appear capable of preventing projections of high crude oil prices in 2027.

The impact of rising energy prices is considerable in Spain, France, and Germany, where subsidies and aid have been implemented to cope with these costs stemming from problems with fuel production, transportation, and supply.

Georgieva believes that despite the slight recovery in oil flows from the Gulf, high crude oil prices, hovering around US$100, will persist.

The scenario is marked by high cracking costs per barrel (above US$100) as a consequence of a global refining capacity deficit. Added to this are the problems with natural gas supplies from the Gulf due to limited transportation options through the Strait of Hormuz.

This scenario is likely to worsen soon due to pressure on countries to replenish their reserves and the increased demand resulting from the arrival of winter in the Northern Hemisphere.

M.Pino

Based on information from specialized economic media outlets

(Reference image source: Raff Liu on Unsplash)

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