If oil hits that mark, it largely will be due to two factors, Daan Struyven, head of oil research at Goldman Sachs told me this week: a Saudi-led OPEC+ decision to limit supply, and a China- and emerging markets-led increase in demand. Neither of those two factors is likely to abate soon.

On the supply side, Saudi Arabia and other OPEC+ economies need a high enough price for long enough to maximize their short-term profits and diversify their economies away from oil. For Saudi, the diversification drive is already apparent in the inroads it’s making in global sports, its positioning as a tourism hub, and its attempt to reinvent cities in projects such as Neom.

But neither Saudi nor other OPEC members can readily afford to lose their energy sector entirely, even if the end of oil lies in the distant future. Instead, some are positioning themselves to become major players in renewable energy and carbon capture and storage. But pulling off this transition requires major investments, and high oil prices will help guarantee an orderly transition.

On the other side, China and emerging markets like India will continue to demand oil as they grow. China’s current economic weakness, Struyven pointed out, is in non-oil dependent sectors such as real estate and exports. Even at a 4-5% growth rate, which is now expected for 2023 and 2024, China will continue to put an upward pressure on oil prices.

Add to that the bumper growth in India—hovering between 6% and 7% this year and next and contributing up to 15% of global growth—and you have the ingredients for high energy prices globally, no matter what happens in the U.S. or other advanced economies.

More news below.

Peter Vanham
peter.vanham@fortune.com
@petervanham

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