Political Tensions Create Uncertainty in Global Oil & Gas


Oil is a temperamental commodity at the best of times, with prices heavily influenced by the slightest fluctuations in supply. The US is currently acting as the proverbial cat amongst the pigeons, with its sanctions on Iran and ongoing trade negotiations with China. If the talks go sour, diminished Chinese economic activity and thus a reduced demand for oil could threaten oil prices further.

Amongst all of this, the US’s own oil coffers continue to grow, and allies like Saudi Arabia, the UAE and Russia have been encouraged to step up production to meet supply shortfalls resulting from the Iranian sanctions. Relying on domestic oil production is not fail-safe, however – unanticipated events such as extreme weather, disruptions at oil-fields or geopolitical conflict could adversely impact an already reduced network of oil suppliers, in turn causing price spikes.

This uncertainty is reflected in recent consensus credit risk data. While the overall credit quality of Global Oil & Gas has been steadily rising since mid-2017, Chart 1 (Credit Trend) below shows this improving trend line stalling in the previous 3 months. Chart 2 (Credit Activity) supports this stagnation, with an approximate net zero effect between deteriorations and improvements in the same time period.

Download PDF

Sovereign Bond Risk Management

In the current low yield environment, many Sovereign bonds issued by different countries are priced at similar levels. However, this Read more

Introduction For Credit Portfolio Managers

Credit Benchmark is a market-led response to three of the most critical issues facing credit risk professionals: 1) The need to Read more

Sovereign Default Risk In Developing Economies

This paper examines the use cases for Credit Benchmark’s Consensus Probabilities of Default (Consensus PDs), in the context of more Read more

Impact Of BCBS Proposals On IRB Banks

The Basel Committee on Banking Supervision recently published wide-reaching proposals for reducing variation in Credit Risk Weighted Assets, with a Read more


Follow us on:

Credit Benchmark brings together internal credit risk views from over 40 leading global financial institutions. The contributions are anonymized, aggregated, and published in the form of consensus ratings and aggregate analytics to provide an independent, real-world perspective of credit risk. Risk and investment professionals at banks, insurance companies, asset managers and other financial firms use the data for insights into the unrated, monitoring and alerting within their portfolios, benchmarking, assessing and analyzing trends, and fulfilling regulatory requirements and capital.