Oil Will Hit This Price When the Energy Crisis Arrives

“A Shock of Unprecedented Breadth and Complexity”

Not very often do you come across global agencies saying the quiet part out loud.

More often than not, governmental and intergovernmental agencies like to exhale rainbows as they speak of all the goodness they report in their research. Rarely do they tell the world just how bad things could get.

And then along comes the International Energy Agency to note—accidentally, it seems—that the energy market is in for a hellacious future.

The IEA is a Paris-based intergovernmental organization that provides policy recommendations, analysis, and data on the global energy industry. And, to be clear, the IEA tried to butter the biscuit I’m talking about in an entirely different way.

The saccharine headline atop an IEA report from late last year was this: World Energy Outlook 2022 shows the global energy crisis can be a historic turning point towards a cleaner and more secure future

Bright and cheery. Rainbows and unicorns. A chicken in every pot. The sunny side of the street.

“A cleaner and more secure future.”

What a relief.

Alas, three little words in the headline really define the bigger, darker story: Global. Energy. Crisis.

That’s what I have been writing to you about for a while now.

While the world is pushing a green energy narrative that is about saving Mother Earth (she’s never needed saving… we’re the ones in trouble) and a Jetsonian future powered by Leprechauns and positive thinking, the reality is closer to an energy hellscape over the remainder of this decade.

We cannot replace more than a century of fossil-fuel infrastructure in just a few short years. That will demand trillions of dollars and a couple of decades to accomplish.

In the meantime, though, producers of fossil fuels have increasingly less desire to ramp up the supply of oil and gas because governments and militant environmentalists keep threatening to fully eradicate the industry.

And, yet, the global economy keeps on growing… day by day, year by year.

Odd thing, but people in the developing world aspire to live like those of us in the Western world. They, too, want refrigerators and a car and a house and the ability to binge the latest Netflix series on an OLED TV.

They do not, however, have the capacity to install expensive green energy technology. So, they rely on oil and gas and coal to power their economies.

Moreover, here in America, the vast majority of consumers do not have the finances to run off and replace their gas-powered cars and trucks with electric vehicles. Most don’t want to, actually, because the infrastructure necessary to recharge them is lacking, and the time needed to recharge is ridiculously inconvenient relative to a quick fill-up at the corner gas station.

Thus, demand for fossil fuels absolutely will not peter out anytime soon.

Yet, the government’s almost pornographic lust for green tech is unstoppable at this point… which means a crisis is already brewing.

Even the IEA seems to see it.

Though the organization’s report is designed to play up the Leprechauns and positive thinking narrative, it’s clear the IEA sees the problem.

I’ll just share a few sentences from the executive summary:

• The world is in the midst of its first global energy crisis—a shock of unprecedented breadth and complexity.
• Prices for spot purchases of natural gas have reached levels never seen before, regularly exceeding the equivalent of $250 for a barrel of oil. Coal prices have also hit record levels, while oil rose well above $100 per barrel in mid-2022 before falling back.
• With energy markets remaining extremely vulnerable, today’s energy shock is a reminder of the fragility and unsustainability of our current energy system.

Those last two bullet points perfectly encapsulate my concern. They hint at what’s to come.

In the wake of the Russian invasion of Ukraine, which arrived just as the world was reopening after the COVID pandemic, natural gas prices shot to the oil-price equivalent of more than $250 per barrel.

Interesting.

That is precisely the price I’m predicting for oil when the crisis arrives.

What I am saying is that we are in the lull before the hurricane hits.

Too much of the policy-making Western world has bought too deeply into the green energy movement. And while green is definitely the color of the future, proponents are trying to repaint the world too fast.

That’s going to lead us to an energy crisis far bigger than what Russia’s invasion wrought.

Be prepared.

Own exposure to energy stocks. They’re going to gush money as much as a blowout well gushes oil.