– One would expect that the attacks in the Red Sea to put an upward pressure on prices however to date the effect has been limited since there has been no disruptions to oil supplies.
– What has also muted the effect of these tensions is the comfortable level of spare capacity that has been replenished thanks to OPEC+ cuts.
– Add to that the deceleration in oil demand growth expected for this year. Although the growth non-OPEC+ supplies is also expected to decelerate, most likely it will still exceed that of demand’s.
– OPEC+’s has a key role to play in maintaining a floor for prices. Its discipline and members’ compliance with quotas will be essential.