Living longer with oil

The conflict in Ukraine has triggered a rapid rise in oil and gas prices. However, this upwards trend was already well under way as a result of demand recovering in the wake of Covid lockdowns, as well as the recent interruption in supply due to underinvestment in new discoveries and the deferral of maintenance work on oil fields.

While there is still the possibility that prices will moderate in the short-term if the war is resolved quickly, there remain a number of fundamental issues with supply and demand that are likely to keep prices higher for longer. For Australian investors, it is worth considering companies that could benefit from this trend.

Supply dynamics

In addition to the extreme environmental pressures from governments and activists