Gas Crisis May Increase Oil Prices By $10 – Mele Kyari

Mele Kyari, group managing director of the Nigerian National Petroleum Corporation (NNPC), has raised alarm over the supply crisis affecting the natural gas market, saying it may push crude oil prices up by $10 a barrel.

In recent months, the price of cooking gas has recorded multiple increases which Kyari attributed to under-supply.

While speaking during an interview with Bloomberg TV, on Wednesday, the NNPC GMD said: “It will absolutely hit crude prices as energy consumers are forced to shift from gas to other fuels,”

“You wouldn’t be very wrong if you said you would see an additional $10 on a barrel maybe three months, maximum six months.”

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“The implication of that is that we’re going to see the effect coming up in a year or two maximum. And that will also affect the gas supply all over the globe and, particularly, in Europe,” 

“That’s going to show up in a number of gas-rich countries and gas supply projects are being stalled, a number of midstream gas projects are being stalled or delayed, and the net effect will be that there will be an impact on pricing coming very shortly.”

“There are a number of things going on now to improve on the gas supply. We surely have issues around gas supply to the LNG plant, in particular, and even into the domestic market and the net effect is that you will see some slippages in cargos in 2022 and even in 2021,” Kyari said.

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“And the implication of that is that you have to do something pretty quickly and we have lost time, we have lost investment and for us, what must happen is a very quick return to a pre-Covid-19 level investment and that, of course, is being adjusted and I know that this is a key challenge for the industry.”