Oil could soar to record high of $150 if Israel-Hamas war escalates further, World Bank says
Picture taken on May 3, 2022 shows a general view of Slovakia’s largest mineral oil refinery Slovnaft in Bratislava, Slovakia.
Joe Klamar | Afp | Getty Images
Record high oil prices could be on the horizon in the event of a conflagration of the ongoing Israel-Hamas war, the World Bank cautioned.
Should the conflict expand beyond the borders of the Gaza Strip to a repeat of the Arab oil embargo in 1973, oil prices could surge to $157 per barrel, the World Bank noted in its latest Commodity Markets Outlook report.
The highest price of oil on record was in July 2008, when Brent traded as high as $147.5 per barrel, according to data from LSEG.
“In a ‘large disruption’ scenario — comparable to the Arab oil embargo in 1973 — the global oil supply would shrink by 6 million to 8 million barrels per day,” the World Bank said. “That would drive prices up by 56% to 75% initially — to between $140 and $157 a barrel.”
The oil crisis fifty years ago sent oil prices rising fourfold after Arab energy ministers imposed an embargo on oil exports on the U.S. in retaliation for its support of Israel in the 1973 Arab-Israeli war, known in Israel as the Yom Kippur War.
If the conflict were to escalate, the global economy would face a dual energy shock for the first time in decades.
Indermit Gill
chief economist, World Bank
The projection is one of World Bank’s three risk scenarios estimating the varying degrees of disruption to oil supplies, based on past historical episodes involving regional conflicts.
In the case of a “small disruption,” global oil supplies will see a reduction of 500,000 barrels per day to 2 million barrels per day, a decrease rivaling that seen during 2011’s Libyan civil war.
A “medium disruption” scenario would knock 3 million to 5 million barrels per day off the markets to push oil prices up to between $109 to $121 per barrel. That’s roughly equivalent to levels reached during the Iraq war in 2003.
Oil prices year-to-daye
With all that being laid out, under the World Bank’s baseline estimates, oil prices are expected to average $90 a barrel in the current quarter before falling to an average of $81 per barrel in 2024 as global economic growth slows. The conflict’s implications on commodity markets “should be limited” if it does not widen, the report said.
“The latest conflict in the Middle East comes on the heels of the biggest shock to commodity markets since the 1970s — Russia’s war with Ukraine,” said World Bank’s Chief Economist Indermit Gill.
That war led to disruptive effects on the global economy that persists to this day, he added.
While both Israel and the Palestinian territories are not major oil players, the conflict sits in a wider key oil producing region.
“If the conflict were to escalate, the global economy would face a dual energy shock for the first time in decades — not just from the war in Ukraine but also from the Middle East,” Gill warned.
GreenPower Motor Company says it’s received three orders for 11 of its BEAST electric Type D school buses for western state school districts in Arizona, California, and Oregon.
GreenPower hasn’t made the sort of headline-grabbing promises or big-money commitments that companies like Nikola and Lion Electric have, but while those companies are floundering GPM seems to be plugging away, taking orders where it can and actually delivering buses to schools. Late last year, the company scored 11 more orders for its flagship BEAST electric school bus.
As far as these latest orders go, the breakdown is:
- seven to Los Banos Unified School District in Los Banos, California
- two for the Hood River County School District in Hood River, Oregon
- two for the Casa Grande Elementary School District in Casa Grande, Arizona
Those two BEAST electric school buses for Arizona will join another 90-passenger BEAST that was delivered to Phoenix Elementary School District #1, which operates 15 schools in the center of Phoenix, late last year.
“As school districts continue to make the change from NOx emitting diesel school buses to a cleaner, healthier means of transporting students, school district transportation departments are pursuing the gold standard of the industry – the GreenPower all-electric, purpose-built (BEAST) school buses,” said Paul Start, GreenPower’s Vice President of Sales, School Bus Group. “(The) GreenPower school bus order pipeline and production schedule are both at record levels with sales projections for (2025) set to eclipse the 2024 calendar year.”
GreenPower moved into an 80,000-square-foot production facility in South Charleston, West Virigina in August 2022, and delivered its first buses to that state the following year.
Electrek’s Take
Since the first horseless carriage companies started operating 100 years ago (give or take), at least 1,900 different companies have been formed in the US, producing over 3,000 brands of American automobiles. By the mid 1980s, that had distilled down to “the big 3.”
All of which is to say: don’t let the recent round of bankruptcies fool you – startups in the car and truck industry is business as usual, but some of these companies will stick around. If you’re wondering which ones, look to the ones that are making units, not promises.
SOURCE | IMAGES: GreenPower Motors.
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While some recent high-profile bankruptcies have cast doubt on the EV startup space recently, medium-duty electric truck maker Harbinger got a shot of credibility this week with a massive $100 million Series B funding round co-led by Capricorn’s Technology Impact Fund.
It’s been a rough couple of weeks for fledgling EV brands like Lion Electric and Canoo, but box van builder Harbinger is bucking the trend, fueling its latest funding round with an order book of 4,690 vehicles that’s valued at nearly $500 million. Some of the company’s more notable customers including Bimbo Bakeries (which owns brands like Sara Lee, Thomas’, and Entenmann’s) and THOR Industries (Airstream, Jayco, Thor), which is also one of the investors in the Series B.
Other prominent investors include Tiger Global, the Coca-Cola System Sustainability Fund, and ArcTern Ventures.
As for what makes Harbinger such an attractive investment prospect, Dipender Saluja, Managing Partner of Capricorn Investment Group’s Technology Impact Fund explains that, “Harbinger has demonstrated a remarkable ability to reach significant milestones far quicker than other EV companies … the market has been impressed by their ability to develop large portions of the vehicle in-house to drive down unit costs, while remaining capital efficient.”
The company plans to use the funds to ramp up to higher-volume production capacity and deliver on existing orders, as well as build-out of the company’s sales, customer support, and service operations.
“Harbinger is entering a rapid growth phase where we are focused on scaling production of our customer-ready platform,” said John Harris, co-founder and CEO. “These funds catalyze significant revenue generation. We’ve developed a vehicle for a segment that is ripe for electrification, and there is a strong product/market fit that will help fuel our upward trajectory through 2025 and beyond.”
The company has raised $200 million since its inception in 2021.
SOURCE | IMAGES: Harbinger.
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There is no state more associated with cars and car culture than Michigan – and the state that’s home to the Motor City has just taken a huge step into the future with the deployment of its first-ever all electric police vehicle.
The 2024 Ford Mustang Mach-E patrol vehicle is assigned to the Michigan State Police State Security Operations Section, and will be to be used by armed, uniformed members of the MSP specializing in general law enforcement and security services at state-owned facilities in the Lansing, MI area.
“This is an exciting opportunity for us to research, in real time, how a battery electric vehicle performs on patrol,” says Col. James F. Grady II, director of the MSP. “Our state properties security officers patrol a substantially smaller number of miles per day than our troopers and motor carrier officers, within city limits and at lower speeds, coupled with the availability of charging infrastructure in downtown Lansing, making this the ideal environment to test the capabilities of a police-package battery electric vehicle.”
The MSP’s Precision Driving Unit is nationally renowned for its annual Police Vehicle Evaluation, which our own Scooter Doll participated in last year, driving the then-new Chevy Blazer EV Police Pursuit Vehicles in a game of “cops and robbers.”
In those tests, the EVs have impressed – but the MSP has been hesitant to commit to a BEV until now. “We began testing battery electric vehicles in 2022, but up until now hybrids were the only alternative fuel vehicle in our fleet,” said Lt. Nicholas Darlington, commander of the Precision Driving Unit. “Adding this battery electric vehicle to our patrol fleet will allow us to study the vehicle’s performance long-term to determine if there is a potential for cost savings and broader applicability within our fleet.”
Michigan joins other states like Wisconsin and California in deploying electric patrol cars and saving big money on fuel and maintenance, with many more out there and many more to come.
SOURCE | IMAGES: Michigan State Police.
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