Oil spike distracts from long-term transition risks

Investors have a crucial role to play in avoiding a 'climate Minsky' moment

A drone attack on Saudi Arabia's largest oil production facility on 14 September sent oil prices surging to their biggest single-day rise since records began.

This spike is a temporary boon to shareholders in many publicly-traded oil and gas companies, but it distracts from a much greater threat to asset prices in the long term.  Driven by climate change, we have slowly begun a transition from fossil fuel energy to low-carbon power. With climatic and regulatory tipping points on the horizon, the Bank of England argued that "a climate Minsky moment, where asset prices adjust quickly… seems possible". The International Energy Agency, meanwhile, estimates future transition-related losses in the sector of between $1trn and $4trn.   But wh...