Social Unrest can be set off due to Energy Crisis

According to Blackstone CEO Stephen Schwarzman, high Energy prices are expected to spark societal upheaval around the world. For the first time in seven years, US oil prices surpassed $85 a barrel on Monday.

According to AAA, gas prices continue to rise, with national averages approaching $3.40 per gallon. Natural gas prices have also increased dramatically, particularly in Europe and Asia, forcing factories to close. According to the Blackstone (BX) billionaire, part of the issue is that fossil fuel businesses are finding it increasingly difficult to borrow money to sustain their costly production activities, particularly in the United States.

Without new production, supply will not be able to keep up. “If you try and raise money to drill holes, it’s almost impossible to get that money,” Schwarzman said, adding that this is happening on an “extremely wide-scale basis.” Schwarzman urged nations to agree on road rules so that society can successfully navigate the Energy transition. There is agreement that something needs to be done, but how to get from where we are now to a green world is a complete mystery.

As the international economy rebounds from Covid, the Energy crisis intensifies inflationary pressures. Not only are customers paying more at the pump for gas, but the government just predicted that home heating costs would jump dramatically this winter. Higher Energy prices are also affecting businesses. According to BlackRock CEO Larry Fink, one of the issues is that authorities are acting more actively to limit fossil fuel supplies than in the past.