S&P Global analyst: High oil prices will persist — France 24

High energy prices continue to accelerate inflation and cause voter discontent in various countries. At the same time, more crude oil is passing through the Strait of Hormuz, while governments are releasing additional volumes from emergency fuel reserves, France 24 reports.

Prices depend on flows through the strait

Jim Burkhard, vice president and head of research for oil, energy and mobility markets at S&P Global, believes that elevated oil prices will become the new normal until flows through the Strait of Hormuz return to normal. According to him, the Middle East cannot be replaced as a source of oil supplies.

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Additional pressure on transportation

Burkhard also described damaged infrastructure and high maritime shipping costs as medium- and long-term challenges. In his assessment, oil refining problems are not limited to the Middle East. He noted that the daily charter rate for a single oil tanker has risen from about $60,000 to more than $1 million.

After two energy crises in less than five years, governments are seeking different ways to strengthen energy security. Some countries may rely on oil and gas production on or near their territory, while others seek to move away from oil and gas. According to Burkhard, the choice will depend on the resources and capabilities of a particular country or region.