JPMorgan Chase CEO Jamie Dimon on Sunday warned that the fallout of Russia’s invasion of Ukraine on oil and gas markets will persist “for years.”
“The danger of this war is extraordinary,” Dimon told CBS’s Margaret Brennan during an interview that aired on “Face the Nation,” saying the public has a “false sense of security.”
“And it can go on for years,” he added. “But this oil and gas thing, it looks like the Europeans will get through it this winter. But this oil and gas problem is going to go on for years. So if I was in the government or anywhere else, I’d say, I have to prepare for getting much worse. I hope it doesn’t. But I would definitely be preparing for it to get much worse.”
The invasion has left European countries scrambling to diversify their energy sources away from Russia, a longtime major supplier to Europe and Germany, in particular.
The situation has only become more precarious as winter sets in and residents turn on the heat.
But Brent crude, a benchmark for global oil prices, has fallen below pre-war levels after spiking immediately following Russia’s invasion.
Dimon suggested the recent declines are in part because of an economic slowdown in China after multiple years of Xi Jinping’s government enforcing a “zero COVID” strategy and the start of a recession in Europe.
But the banking executive warned that those short-term declines won’t last forever, calling for a “Marshall Plan for energy” that includes significant investment in energy infrastructure to boost production and keep prices low.
“Those things will reverse,” Dimon told Brennan. “And this underinvestment in oil and gas, it will hurt you two or three years out. It’s quite predictable, but it’s not today.”
Dimon indicated he regularly speaks with officials in the Biden administration about his concerns, including John Podesta, who the president tapped to lead implementation of $370 billion of climate investments included in the Inflation Reduction Act.
“We need secure, reliable, cheap oil and gas,” Dimon said on CBS. “The problem, you know, a lot of people think that oil and gas prices being high is good for CO2. It’s not.”