Roubini: The shale gas revolution could become a game changer

Nouriel Roubini: Certainly. The shale gas revolution could become a game changer. The US will be able to exploit the reserves much faster than other countries because of less environmental concerns and expertise availability. Supply of oil and gas can increase over time relative to the demand. But the increase in demand is going to remain robust. Emerging markets are growing fast and there is urbanisation, industrialisation, population growth and per capita income growth. The wild card in energy remains a geopolitical risk. If there was a conflict between, say, Israel and Iran on the issue of nuclear proliferation, the fuel premium will rise. That will spike oil prices. Historically geopolitical shocks in the Middle East have been sources of a sharp rise in the fuel premium and the prices of oil. So, that is a risk which has to be considered.