Kneissl Believes New Supercycle In Oil Market Would Be 'Logical Conclusion'

ST. PETERSBURG (UrduPoint News / Sputnik - 07th June, 2021) A new supercycle in the oil market is quite possible, since the trend of insufficient funding of the industry is quite visible already, ex-Austrian Foreign Minister, independent director of Russia's Rosneft Board of Directors Karin Kneissl told reporters.

"A new supercycle is a logical conclusion if you look in particular at the prices of certain metals. You know, no one cared about lithium 10 years ago, and now everybody's watching a documentary on Bolivia or Chile and has basic knowledge on emissions and what lithium and other metal exploration matters to the environment, to labour situation, and what it means above all to the price," Kneissl said at a briefing at the St. Petersburg International Economic Forum (SPIEF).

Kneissl expressed the belief that that energy can never be "innocent."

"Any type of energy has its implications for the environment. But political persecution of a certain industry leads to reduced investments, a freeze of production, leading to the deficit, which, in turn, marks the beginning of a new supercycle," Kneissl explained.

According to the independent member of Rosneft's board of directors, underinvestment "is a fact," and both the climate agenda and the coronavirus pandemic contributed to this situation.

"We are looking into the decisions we have seen during this surreal 2020, with Tesla financial indication exploding and taking over the financial value of Audi auto company. But will it be the same in two, three years, a decade? I doubt it," Kneissl concluded.

A supercycle is a period of structural excess of demand over supply that persists for a long period of time and results in a prolonged increase in prices. It was last observed in the oil market in the period between 2003 and 2014. Early this year, many oil market analysts warned of a potential new supercycle amid aggressive climate policies and the continuing pandemic-related pressure. JPMorgan and Goldman Sachs experts expressed the belief that oil prices could surge to $80-100 per barrel in 2021 or later.

SPIEF-2021 was held from June 2-5 in the Russian city of St.Petersburg. The Rossiya Segodnya international information agency was an official media partner of the event.