US and EU sanctions against Moscow are in danger of turning round and biting the west by constraining global oil supply and pushing up prices, the former chief executive of BP has warned.
Tony Hayward said that cutting Russia’s energy groups off from capital markets and restricting their access to western oil technology would eventually lead to less investment in Russian oil production and damage long-term supply. He said the US shale boom had obscured the growing risks to the world’s supply but its effect would wear off, leaving the global economy dangerously exposed to potential disruptions in the flow of oil.
He spoke as the US and Europe expanded sanctions against Russia on Friday, with the US adding Gazprom, Europe’s leading energy provider, and Lukoil, the privately owned oil group, to the companies deprived of US goods, technology and services for deep water, Arctic offshore and shale projects. The EU and US have also imposed restrictions on financing for some state-owned Russian energy groups.