Take Brexit Britain and Trump’s America. Add climate change, instability in the Middle East, cryptocurrencies, and self-driving cars… and you have the world in 2018: hopeful, yet seemingly unpredictable.

We have assembled 11 unlikely events that - if they somehow happened - have the potential to profoundly affect the world as we know it.

To assess the political, economic, financial, and social impacts, IG brought together global economic/political experts to give their perspectives and predictions.

Explore some of the great unknowns facing us all today

oil field

What If

Oil returns to $100 per barrel

Pic: Planet Labs, Inc.

Oil prices have dropped by around 50% over the last five years – the result of a slowdown in global economic growth and increased US production through fracking. But with OPEC maintaining its cuts, increased US tensions with Iran, and Venezuelan production in crisis, could we see prices climb to $100 per barrel again?

Category: Economy Region: Global

map of oil world

Our panel of experts (interviewed March-May 2018):

Robert Kelly

Robert Kelly

Professor of Political Science and Diplomacy, Pusan National University

More about Robert

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Robert Kelly is a Professor in the Department of Political Science and Diplomacy, Pusan National University in South Korea. His work focuses on international security and political economy. His areas of interest are East Asian security, US foreign policy, the Middle East, the World Bank and the International Monetary Fund. Kelly has appeared as an analyst on television news services, including the BBC and CNN.

Joshua Mahony

Joshua Mahony

Market Analyst, IG

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Joshua Mahony is a Market Analyst at IG. He joined IG in 2015 following a three-year stint as a forex market analyst. He has featured regularly within both written press and TV over the years. Coming from an economics background, Mahony has worked within Deutsche Bank and Barclays Capital investment banks. He holds both CFTe and MSTA technical analysis qualifications.

Ben Page

Ben Page

CEO, Ipsos MORI

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Ben Page is Chief Executive of Ipsos MORI. A graduate of Oxford University, Page is a frequent writer and speaker on trends, leadership and performance management. He has previously worked for companies including Shell, BAE Systems, Sky TV and IBM. Page has also worked closely with ministers and senior policy makers across government, leading on work for Downing Street, the Cabinet Office, the Home Office and the Department of Health.

[ What if this happened? ]

Robert Kelly
Robert Kelly
The biggest overall effect would be Russian, Iranian, and Venezuelan belligerence.
Joshua Mahony
Joshua Mahony
There would be a reduction in disposable income, with driving becoming increasingly expensive. It would also drive inflation higher.
Ben Page
Ben Page
It has massive issues in terms of our dependence on cheap cars. It’ll be like the 1970s, when we saw all sorts of effects. People had fewer children, there was a massive crisis, and then the miners went on strike as well. I remember sitting at home of an evening with no electricity. But it would be a lot more dramatic now because your computer wouldn’t work, nothing would work. A lot of the time, because Britain is becoming more self-sufficient, you can go onto the National Grid website, and see that half our electricity now most of the time is generated either by nuclear or wind power. So the amount that we’re burning – gas from Vladimir Putin, or indeed the North Sea – is much lower.

[ Likelihood ]

We asked our experts to rate how likely it is that oil will return to $100 per barrel.

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[ Impact ]

Panel members also rated the impact they would expect this event to have.

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The Political Impact

Robert Kelly

Robert Kelly

Professor of Political Science and Diplomacy, Pusan National University

There would be geopolitical trouble from rogues like Iran and Russia as their budgets got back into balance. There would be nothing in the consuming states but for politicians using it as a cheap election issue. One effect would be higher consumer debt in the Organisation for Economic Co-operation and Development. There would be even greater interest in renewables, liquefied natural gas, fracking, and other alternatives.
Joshua Mahony

Joshua Mahony

Market Analyst, IG

A boost for GDP in oil producing nations would help provide support for reigning governments. There would be less people driving, with public transport providers enjoying a boom.
Ben Page

Ben Page

It’d be a shock, but $100 probably isn’t enough to make the political effect really bad. It’d probably be more like $200 a barrel.

The Economic Impact

Joshua Mahony

Joshua Mahony

Market Analyst, IG

There would be a major improvement to US GDP, with producers raising production to take advantage of a temporary bounty. A rise in oil prices is negative for companies, which have increased costs to pass on, causing a rise in inflation. That inflation would in turn impact monetary policy, with higher inflation driving a more hawkish tone and potentially culminating in rate rises.
Ben Page

Ben Page

CEO, Ipsos MORI

It would have a big impact on business, as it increases plastic manufacturing costs. A big shock to oil prices would drive up inflation – but it would need to over $100 a barrel to have a major effect.
Oil prices have fallen dramatically since 2011, with a barrel of crude oil worth about two-thirds of what it was worth at its peak in the last decade. Fracking – especially in the US, which is a big global importer of oil and oil products – can be largely thanked for this drop. Moody’s says that Russia and Venezuela are hardest hit, because they are countries with ‘large recurring expenditure that may be politically challenging to cut’.

The Financial Impact

Robert Kelly

Robert Kelly

Professor of Political Science and Diplomacy, Pusan National University

Oil markets have been around for a long time and seen a lot of turmoil. The price spike would have to be a lot higher to generate real turmoil. More traders would get into energy as profits soared.
Joshua Mahony

Joshua Mahony

Market Analyst, IG

There would be a boost for commodity currencies such as the Canadian dollar, while a rise in inflation could help boost currencies where their central bank is highly price sensitive at the time. Higher-priced oil would see increased flows into major exporters such as the US, driving money out of major importing nations.

The Social Impact

Robert Kelly

Robert Kelly

Professor of Political Science and Diplomacy, Pusan National University

There would be lots of consumer complaining, especially in the US, but nothing more.
Ben Page

Ben Page

CEO, Ipsos MORI

Clearly it would have a big impact on people driving, most people have a car. Already we are much less fossil fuel dependent than in the past, so wind and solar power and electric cars – already growing rapidly – will get another boost. So for most people, it would be another squeeze on their disposable income but not a complete catastrophe.
As the oil price rose in the ’90s and early ’00s, it was common for governments and people to start ditching fossil fuels and move to green transport and energy. However, a significant drop in the oil price meant that some countries stopped fearing being dependent on oil and have failed to modernise, while others have kept up the green crusade. China is one of the perhaps more unlikely leaders in electric car sales. In the first quarter of 2018, 142,445 electric vehicles were sold in China, a 154% increase on the previous year.

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