In that sense, gas markets are just the latest to do so. International renewable energy certificates -the global equivalent to a guarantee of origin- as well as CO2 markets, tend to be globalized as well. The same is expected of hydrogen and power markets in future too.
So whether it’s a drought in Brazil, a strike in South Africa, coal-import quotas in China, a geopolitical move by Russia, a nuclear shutdown in Japan, or a cold-front on the northeastern coast of the US, commodity markets will continue to further intertwine, adding liquidity to distant markets and offering multiple hedging opportunities.
Just as European CO2 prices have attracted hedge funds from distant lands, eventually so will the landing prices of LNG in South Korea, or a reload out of France heading to Chile.
And that, ultimately, will require a global view of things, even if most of the portfolio is managed locally.
About the author
Andrés has over two decades of experience in geopolitics and energy. A political scientist by training, he’s spent most of his career writing, both as an analyst and an author. As a journalist, he's been published in outlets such as the New York Times, the Wall Street Journal, and Time Magazine.
Andrés advises on energy politics and regulation, geographical expansion, risk analysis, and green market developments.