Oil supply could easily be threatened by geopolitical risks, and such a disruption could cause oil prices to skyrocket, experts tell CNBC.
Neil Dwane, global strategist and chief investment officer of European equity at Allianz Global Investors, warned that oil production supply is looking threatened around the world.
“Venezuela’s 2 million barrels of oil a day could literally go any day. Mexico looks poor. Azerbaijan’s in trouble. China’s own production is collapsing rapidly,” he told CNBC’s Squawk Box on Friday.
“One only has to have one mistake and the only thing you’ll be talking about all morning is oil at $120.”
Dwane said geopolitical risks could cause prices to skyrocket as several oil producing states are fragile, and oil prices are currently too low for anyone to want to drill fresh wells which may be needed in the future.
Herman Wang, OPEC specialist at S&P Global Platts, agreed that there is significant geopolitical risk to oil supply.
“There are plausible scenarios where you could see, perhaps not $120 a barrel, but an elevated oil price, say $70 to $80 on some of these geopolitical and some of the supply concerns. Venezuela certainly is a mess right now,” he told CNBC’s Squawk Box on Friday.
Source: CNBC
