Gazprom CEO’s $250 Oil Forecast Deals Doom Options Traders Love

(Bloomberg) — At $250 a barrel for crude oil, food prices double. The U.S., Japan and Europe plunge into deep recession. Companies go bankrupt. Airlines are nationalized. Sport-utility vehicle sales dry up as gasoline tops $7 a gallon.

The scenario may not be unimaginable. Alexei Miller, chief executive officer of OAO Gazprom, the world’s biggest natural- gas company, said June 10 that crude will climb to $250 a barrel in the “foreseeable future.” Prices may reach that level only after a war or attack on major oil installations, says Jeff Spittel, an analyst at Natixis Bleichroeder Inc. in New York.


While executives, elected leaders and economists disagree on the probability of Miller’s vision, there is consensus that the price would jolt everyday life.

“It would be a disaster for all the oil-importing countries, all the democracies and China,” says James Woolsey, vice president of consultant Booz Allen & Hamilton Inc. in McLean, Virginia, and a former Central Intelligence Agency director. “And it would be hugely beneficial for the many monarchies and dictatorships that are the main suppliers.”

Bloomberg