Can The Gulf Be Rebuilt? Paul Sankey, Arjun Murit, And Erik Townsend

Global oil markets face a structural crisis defined by a severe lack of refining capacity, which has turned persistent, high crack spreads into the new norm. While crude oil prices have remained relatively stable due to strategic inventory releases and demand adjustments in developing Asia, the destruction of Russian and Middle Eastern refining infrastructure creates an intractable supply bottleneck for finished products like diesel. The shift toward electric vehicles and alternative energy technologies provides some relief, yet the global economy remains tethered to fossil fuels. Geopolitical instability in the Middle East and the ongoing conflict in Ukraine threaten to prolong this period of extreme volatility. Future energy security depends on balancing capital returns with necessary investments in new infrastructure and potentially leveraging advanced nuclear power, as the current reliance on existing, damaged systems remains unsustainable for long-term global growth.