Western sanctions against Russia and turmoil in the Middle East could reverse a decline in oil prices and send them rocketing to $150 a barrel, according to former BP boss Tony Hayward.
Investment in production from untapped resources in the Arctic and shale reserves in Siberia are at risk, which could constrain global supplies and send prices soaring, he warned.
His comments in a UK newspaper interview follow sanctions against Russia’s Gazprom, Gazprom Neft, Lukoil, Surgutneftegas and Rosneft, banning western firms from supporting their activities in exploration or production from deepwater, Arctic offshore or shale projects.
The new measures, designed to put further pressure on President Vladimir Putin over Russia’s actions in Ukraine, are a major broadening of previous sanctions banning the export of high technology oil equipment into Russia.
Projects in jeopardy include a landmark drilling programme by US giant ExxonMobil in the Russian Arctic that started in August as part of a joint venture with Rosneft.
Dozens of other projects that Rosneft and Gazprom Neft agreed with Exxon, Shell, Statoil and Eni will have to be put on hold.
The sanctions are expected to bring an abrupt halt to exploration of Russia’s huge Arctic and shale oil reserves and complicate financing of existing projects from the Caspian Sea to Iraq and Ghana.
Mr Hayward, now chief executive of oil investment company Genel Energy and chairman of commodities group Glencore, was CEO of BP around the time of the catastrophic Deepwater Horizon blowout in the Gulf of Mexico in 2010.
He famously told reporters at the height of the crisis “I would like my life back”.
World oil prices hit a record $145 a barrel in July 2008.
Brent crude has fallen from about $108 a barrel at the start of this year to just under $97 yesterday.
According to Mr Hayward, the recent boom in US shale production has lulled the world into a “false sense of security” about oil supplies, leaving the global economy “dangerously exposed” to any disruptions in production.
Shale output has also stopped oil prices shooting up to $150 amid political turmoil in the Middle East, he said.
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