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Energy in Latin America

Conclusion: opportunity in the crisis

One way of thinking about the current bust in oil and gas prices is that there will be one central scenario in the early 2020s, with two possible variants. The current crisis is unprecedented in its severity but there are reasons to believe it will follow a familiar pattern. We have been here before. The slump in prices will lead to a market-led correction: high-cost oil fields will be shut in, some oil and gas producers will go bankrupt, many Latin American oil producing countries will experience deep recession, and in perhaps two-to-five years the oil glut will be eliminated, consumption will recover, and prices will begin to rise again. However, there are higher carbon and lower-carbon versions of this cycle.

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