CBA chief economist Luke Yeaman clarifies ‘critical breaking point in oil exports’ at Australian Defence Industry Accelerator Summit

Yeaman examined the emergence of a new global economic era shaped by significant shifts in geopolitics, technology and demographics during the speech.

He spoke of forces driving increased volatility in global financial markets, reshaping critical supply chains, and accelerating defence investment domestically and globally.

Defence, energy and artificial intelligence are all driving an investment upswing in global markets at the moment, he said,

Despite the surge, CBA is expecting more pressure on construction, material costs as well as interest rates, Yeaman confirmed.

Specifically, Yeaman addressed concerns around a possibly AI bubble scenario.

“There are reasons to be concerned, he said, 40 artificial intelligence companies account for half the US stock exchange. That is a big concentration of risk.

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“Traditional valuations of AI are high. We do expect to see some corrections over time. But at CBA, we don’t think this is dot.com 2.0. Fundamentally, they look solid. We think there is real value in artificial intelligence over the next few years.

“Importantly, there is big upside in AI. If adopted well, we could see productivity lift of 1 per cent a year is entirely plausible, optimistically 2.5 per cent or pessimistically 0.5 per cent.”

Addressing the disruption of oil exports through the Strait of Hormuz, Yeaman said there is concern about reaching a critical breaking point of the cost of oil.

One of the biggest risks that we are watching at the moment is the likelihood of seeing a critically breaking point in the price of oil, he said.

Yeaman clarified that CBA has reportedly forecast that a disruption of oil exports for six to eight weeks could bring a catastrophic consequence of US$150 a barrel plus.

Recent disruptions in the Middle East have made it clear that it is actually very easy to close down economic choke points at a relatively cheap cost, he said.

Robert Dougherty

Robert is a senior journalist who has previously worked for Seven West Media in Western Australia, as well as Fairfax Media and Australian Community Media in New South Wales. He has produced national headlines, photography and videography of emergency services, business, community, defence and government news across Australia. Robert graduated with a Bachelor of Arts, Majoring in Public Relations and Journalism at Curtin University, attended student exchange program with Fudan University and holds Tier 1 General Advice certification for Kaplan Professional. Reach out via email at This email address is being protected from spambots. You need JavaScript enabled to view it. or via LinkedIn.