Oil prices often become a major concern when global conflicts threaten the world’s supply, raising questions about inflation, gas prices and the broader economy. But while experts warn disruptions could drive prices higher and fuel inflation, one ASU professor said the impact may not be as severe as history would suggest.
Hitendra Chaturvedi, Supply Chain Professor at the W. P. Carey School of Business at ASU, joined “Arizona Horizon” to share his opinions on the oil supply and effects to the global economy.
So much oil does the world need? Chaturvedi puts it at about 100 million barrels of oil and says that the need for oil is driven by many factors.
One of the fundamental things that has changed when it comes to dealing with the growing prices of gas due the the oil supply is rise global acceptance of electric vehicles. Chaturvedi said that according to some projections, in 2035, electric vehicles could be replacing “15 to 20 million barrels a day”.
Chaturvedi noted that China and countries in Europe have made the moves towards acquiring more electric vehicles as opposed to gas powered vehicle. He also added that when it comes to moving towards electric vehicles, “this is not a sustainability discussion anymore, this is alternate energy discussion”.
From a strategic lens, Chaturvedi notes that oil will not lose strategic value. But rather, he believes that electricity will be “the next strategic asset and the next supply chain”.
Looking ahead to the future and the role that oil could potentially play in it, Chaturvedi says that “the power that oil once used to have is not there anymore”.
“Five, 10 years down the road, I think oil will be important, but it is not going to be the one behind which wars will be fought”. Chaturvedi said.
