The Hindu : National : “U.S. recession can have cascading impact”

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“U.S. recession can have cascading impact”

N. Ravi Kumar

Karin Kneissl

CHENNAI: Global oil prices may decline if recession in countries that are major consumers lasts long, according to Karin Kneissl, an energy analyst and freelance journalist based in Vienna, Austria.

“The picture can also be different in a few months to come … things could take a different path,” she told The Hindu in an interview on Thursday. She was responding to a query at what level the galloping crude prices would settle.

While refraining from making a prediction on the price, she said if recession continued, particularly in the U.S., it would have a cascading impact.

According to Dr. Kneissl, who has a doctorate in international law and who teaches at various universities, the oil prices went down during the recession in the 1980s and the Asian crisis in mid-1990s. If there is a major recession in the U.S., it will also affect developing economies such as India and China. “If it doesn’t affect them [India and China] physically, it will affect the markets at least,” she said, adding there would be some sort of panicking.

Different ministries

To a query, Dr. Kneissl said there was need for an integrated body to handle energy issues in India. “I was astonished to see how many different ministries deal with energy-related issues … you have so many ministries of petroleum, power, coal but don’t have an energy ministry. I think it would make sense for India to have an energy ministry.”

On oil subsidies, she said that while removing these concessions, the governments should provide alternatives in terms of efficient and affordable public transport. But more than subsidies, it was the issue of tax on petroleum products that mattered most in several countries.

On the Iran-Pakistan-India pipeline, Dr. Kneissl said though there were issues concerning the price at which gas would be sold, a lot would depend on the new government in Pakistan and its approach to the project.

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