Of course, the context was different in previous periods of volatility. Hydrocarbon alternatives were limited and speculative until advances over the past decade. Today, the prospect of dramatic oil and gas price fluctuations may be enough to convince investors that there is a market for clean energy free of those swings. In my conversations in the last two weeks, I heard just that. Investors still don’t know exactly what’s to come, but they feel assured that alternative fuels and power sources have a path to market.
And yet the public markets don’t really reflect that. Stocks have brushed aside the prospect that turmoil in the region will persist much longer, counting on Trump to back off the hostilities.
The ceasefire will need not just to hold but to turn into a durable solution. Otherwise the wakeup call is coming soon. Cooking fuel is already inaccessible in parts of Asia. Jet fuel is running low in Europe. Fuel prices are higher globally. Even though the U.S. has been somewhat insulated, the country will begin to send more hydrocarbon products to other markets, leaving costs to rise at home. At the spring meetings of the International Monetary Fund (IMF) and World Bank in Washington this week, the IMF warned of slowing growth and that “downside risks dominate” the economic outlook. “We’ve been sort of in la la land,” says McNally. “Well, la la land ends this month.”
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