In this interview with Dan Murphy from CNBC Middle East, Dr Carole Nakhle, CEO of Crystol Energy, discusses the proposal of the Italian Prime Minister, Mario Draghi, of creating a new cartel to cap oil prices, the NOPEC bill, and the latest oil market dynamics.
Dr Nakhle says that Draghi’s proposal is controversial and simplistic; one cannot simply attack a cartel by creating another cartel. The main driver behind this proposition is to show that governments in Europe and the US are trying to do something to tame the increase in energy prices and put the blame on OPEC. Although the producers’ group has played an important role, there are other market fundamentals and geopolitical factors that are driving oil markets today.
On the NOPEC legislation currently discussed in the US, Dr Nakhle says that the bill emerges when oil prices are high and disappears when they are low, indicating political motivation behind the bill – an attempt to exercise pressure on OPEC to release more barrels. The bill is unlikely to go too far, with US presidents – Democrat and Republican alike – previously refusing to sign it.
Dr Nakhle concludes that even if there are tensions between the US and Saudi Arabia, OPEC includes more countries. Therefore, if the bill is passed, it will have repercussions on trade, oil markets, and the geopolitical relations between the US and various OPEC members.
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