The $200 oil price danger: Energy giant warns of systemic collapse

North Sea Brent crude has surpassed the $116 level, while American WTI crude has crossed the $100 mark, sending global markets into a state of alarm. As the possibility of oil reaching $200 per barrel due to the regional crisis becomes more serious by the day, experts fear that the rise in prices will disrupt economic balances.

Disruptions in the Strait of Hormuz, through which approximately 20 percent of global oil and liquefied natural gas (LNG) supply passes, are deeply affecting the global supply chain. It is stated that a daily deficit of 9 million barrels of oil has emerged, a figure equivalent to the total daily consumption of many countries in Europe.

If it lasts 3-4 months, the system will collapse

TotalEnergies CEO Patrick Pouyanné warned, "If this crisis continues for 3-4 months, we will face the risk of a systemic collapse for the entire world." While even the current $110-116 band is difficult to manage, markets fear that prices will spiral out of control.

In the United States, officials and analysts have also begun to voice the possibility that crude oil prices could rise to $200 per barrel. Market analysts from Commerzbank emphasized that the real concern goes beyond a short-term inflation shock, noting that a persistent energy shortage combined with economic stagnation is increasing the risk of global "stagflation."

New measures and demand decline in Asia

Due to rising prices and dwindling supply, some Asian countries are implementing restrictions on oil distribution. It is observed that oil is being rationed, consumption is being regulated, and strategic reserves are being increased. While crude oil demand in the region has already decreased by 2 million barrels per day, the price of refined products such as diesel and jet fuel has also exceeded $200 per barrel in some areas, leading to a significant rise in shipping and transportation costs.

The energy contraction in the economy is affecting many sectors through chain reactions. Oil and natural gas, in particular, are among the essential inputs not only in transportation but also in many production areas ranging from plastics to chemicals and fertilizers. As spring approaches, farmers are beginning to face difficulties in procuring fertilizer, a situation viewed as a harbinger of even greater increases in global food prices.

American Petroleum Institute President Mike Sommers summarizes the current situation with the words, "Options for damage mitigation and room for maneuver are rapidly running out."

News Source: 12punto