Knowledge@Wharton interviews Global Energy Center Nonresident Senior Fellow Brenda Shaffer on how geopolitical developments are affecting the global oil market:
Geopolitical events tend to have a direct impact on oil prices in a tight market when demand and supply run close to each other, said Brenda Shaffer, a professor at Georgetown University’s Center for Eurasian, Russian and East European Studies (CERES). “When we have a liquid market, like we have now, where there is a huge gap between supply and demand, then geopolitical events, unless they affect the physical supply of oil, don’t tend to have more than a hiccup on oil prices,” she explained. Shaffer is also a senior fellow at the Global Energy Center at the Atlantic Council, a Washington, D.C.-based organization focused on promoting global security.