Oil, intl macro and geopolitics Torbjrn Becker Director,
Stockholm Institute of Transition Economics (SITE) @ Stockholm
School of Economics www.hhs.se/site [email protected]
Slide 2
Points to discuss A few notes on supply and demand Global
warming, carbon taxes etc? Macro is back Traditional
reserves/production and demand who are the major players on both
sides Winners and loosers of shale gas/oil BRICS and energy
Emerging markets overtaking developed countries in terms of
economic size Russia
Slide 3
Simply Supply and Demand but Short vs long run TK focused on
structural factors that are important for long-run price trends
(climate policies?) Short run factors still create enormous
variation in prices with uncertain forecasts link with macro
Partial vs general equilibrium First-round price effects from new
supply sources and reduced demand will affect economic activity and
also incentives for future investment in both enhancing supply and
reducing demand Emerging markets will be very important for how
this evolves, both on supply and demand side
Slide 4
Useful forecasts?
Slide 5
Fluctuations in economic activity and in the outlook are the
primary determinant of short-term commodity price movements, with
some caveats. . commodity-wide factors have mainly reflected common
macroeconomic developments IMF 2012
Slide 6
Oil supply (2012)
Slide 7
Oil demand (2012)
Slide 8
Growth forecast (2011-2017 USD BNP, IMF)
Slide 9
Oil reserves
Slide 10
Gas reserves
Slide 11
Winners and Loosers? Time perspective crucial Transition
processes triggered by oil price swings are likely to be messy in
countries where autocratic political power structures are based on
extraction revenues How many oil nations can develop by just
extracting oil? Can Russia catch up with West just by
extraction?
Slide 12
Oil supply vs political freedom 7/7 6/6 1/1 1/1(?) 6/5 2/2 ?/?
5/5 6/6 4/5 5/5 4/4 Political rights/Civil liberties, 1 is best, 7
worst (Freedom house)
Slide 13
WB: Subsoil wealth of nations ($/capita)
Slide 14
Total wealth of nations ($/capita)
Slide 15
Putins Russia
Slide 16
Oil price drives Russian GDP
Slide 17
Russian exports, all about extraction
Slide 18
Russian government budget, half is oil and gas
Slide 19
Medvedevs awakeing The crisis made the dependence on oil and
gas and need for reforms obvious Russia forward! in Sept 2009
Agenda Innovations (Skolkovo=Silicon Valley) Energy efficiency
International financial center Fight corruption, Law and order
E-government Putin and higher oil prices has changed the sense of
urgency for reforms
Slide 20
Thanks! Torbjrn Becker Stockholm Institute of Transition
Economics (SITE)/ stekonomiska institutet vid Handelshgskolan i
Stockholm www.hhs.se/site [email protected]
