Publications: Notes at the Margin

Secular Stagnation and the Price of Oil (December 28, 2015)


In one or two months, Royal Dutch Shell will complete its acquisition of British Gas. If the predictions of secular stagnation come to fruition, these combined companies may be filing for bankruptcy by October 2018. This is not hyperbole. Within thirty months, one or more of the largest oil companies may be forced to declare themselves bankrupt if the global economy sinks into secular stagnation. The failure to think about secular stagnation by those working in energy is understandable. It has required exceptional effort to stay in business in 2015 as prices crashed. However, a prolonged global slowdown has implications for the energy sector that cannot be ignored, especially if oil-exporting countries continue their present strategy of maximizing production.


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