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Geopolitical risks worst in 50 years, warns oil services boss

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By illuminem briefings

· 2 min read

illuminem summarizes for you the essential news of the day. Read the full piece on Financial Times or enjoy below:

🗞️ Driving the news: Lorenzo Simonelli, CEO of Baker Hughes, warns that geopolitical risks are at their highest in 50 years, with conflicts in Ukraine and the Middle East threatening global energy stability

🔭 The context: The ongoing conflict between Israel and Hamas, coupled with Russia's invasion of Ukraine, has created a fragile geopolitical climate
• This has led to a significant increase in oil prices and a heightened demand for Liquified Natural Gas (LNG), especially from Europe as it reduces dependence on Russian gas

🌍 Why it matters for the planet: The shift towards LNG is seen as a critical step in reducing reliance on Russian gas and managing energy supplies amidst geopolitical tensions
• This boom in LNG has drawn criticism from climate campaigners who fear it could hinder Europe's emissions reduction efforts

⏭️ What's next: Simonelli predicts a continued rise in LNG projects, especially in the US Gulf Coast, to meet European demand
• He emphasizes LNG's role in replacing coal and contributing to cleaner energy, viewing it as not just a transition fuel but a destination fuel

💬 One quote: "This is a good moment for LNG. If you look at affordability, security, and sustainability, natural gas and LNG is not just a transition fuel but a destination fuel" (Lorenzo Simonelli, CEO of Baker Hughes)

📈 One stat: Baker Hughes forecasts nearly $9bn in LNG equipment orders for 2022 and 2023, a significant increase from previous years, highlighting the growing importance of LNG in the global energy mix

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