Publications: Notes at the Margin

Financial Contagion: A Threat to Oil's Survival (March 27, 2023)


It is extremely hard to watch anyone continuously engage in behavior that will lead to a wasted life or even death. It is equally difficult to watch an industry one has studied for a lifetime repeatedly miss important signals regarding its future, a future that may include marginalization. Yet today, the oil industry is once again ignoring key and obvious signs of jeopardy from external sources. Indeed, this time its survival may be at stake. Yes, the world will need some oil. However, executives and oil ministers seem oblivious to the indications of major problems—and the possibility of being sucked under by the sinking financial system.


Governments and central banks will save the financial system, as they often have. No one, though, will throw a life vest to the oil industry.


Sadly, this is far from the first time those in the oil industry have put their heads in the sand. Our March 20 report titled “Petro Ostriches” emphasized this point. However, those associated with the industry outdid themselves last week at Financial Times’ Commodities Global Summit.


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