News Analysis
The global oil price outlook depends on the Chinese economy, the Iran nuclear deal, and the war in Ukraine.
On Aug. 15, world oil prices dropped due to speculation that decreased industrial output in China would reduce global demand. China’s economy has been trending downward most of this year, which is pressuring world oil prices to drop even as the Russian war in Ukraine is pushing prices up.
China—already suffering from a debt crisis, real estate crisis, and reduced industrial activity caused by ongoing COVID-19 lockdowns—is also facing water shortages, and an energy crisis as the summer heat has caused a drought. Water levels in rivers have dropped to near record levels, reducing hydroelectric output that has resulted in factory slowdowns and closures. At the same time, increases in the price of oil and natural gas have left Chinese gas companies struggling to earn a profit. Consequently, China’s green agenda may be put on hold, with gas project construction halted due to a lack of profitability….