This is clear this week in Houston during CERAWeek, the world's largest energy conference: the effects of this conflict, which lasts less than four weeks, will be felt for many years to come.
This genie can't be put back in the bottle, Paul Sankey, senior advisor at consulting firm Oliver Wyman, said during CERAWeek. The Trump administration's actions to eliminate Iran's authorities and remove its emerging threat to the Strait of Hormuz “have been counterproductive.”
“Iran has never closed the strait before,” Sankey said. — This threat has now become permanent.
– We are dealing here with a structural change that concerns the domestic energy sector, nuclear energy and coal – added Sankey. — Countries like the UK need to completely rethink their energy policy.
European countries where natural gas prices have skyrocketed may look to Spain, where a massive expansion of solar power plants has helped cushion the worst of the surge in natural gas prices, which they imported from Qatar and whose export infrastructure has been all but destroyed by Iran. LNG prices in Europe were almost $20. per million British thermal units, and in Asia more than $20, according to Platts, which provides market indicators and price ratings as part of S&P Global Energy.
— LNG prices above $20. are unsustainable,” said S&P Global LNG director Ross Wyeno. — That is, LNG prices above $10. probably not really sustainable for some of these emerging economies.
Even if the United States, Israel and Iran withdraw — which is unlikely for now — Iran has proven it can virtually block traffic across the strait and strike regional energy targets whenever it wants. Repairing all the damage will require more than just rebuilding the natural gas fields and export facilities that Iran has destroyed, says Tom Donilon, vice president of investment management firm Blackrock. “Expect repair and modernization costs to run into the billions, and not all of it will go to the traditional oil and gas industry,” Donilon said during CERAWeek.
