Biden Acknowledges OPEC’s Raison D’Être

In this interview given to Cyba Audi from Asharq Business Bloomberg, Dr Carole Nakhle, CEO of Crystol Energy, comments on US President Joe Biden’s visit to Saudi Arabia and discusses the latest dynamics in oil markets. 

Dr Carole Nakhle (left) discusses US President Biden's visit to Saudi Arabia with Cyba Audi from Asharq Business Bloomberg

Key highlights from the discussion:

  1. During his visit to Saudi Arabia, President Biden acknowledged OPEC’s role in “stabilising” oil markets, in line with the organisation’s officially stated objective. That is a notable shift in US attitude towards OPEC in general and Saudi Arabia in particular.
  2. One of the main objectives from Biden’s is to isolate Russia. However, the Saudis reaffirmed Russia’s importance to OPEC+. After all, it is a strategic partner which is key for the longevity of OPEC+ given its scale of production.
  3. A price cap on Russian oil is only effective if most of the world’s largest oil consumers are included. China and India, the main purchasers of Russian crude and products are not likely to join forces with Western powers limiting the effectiveness of the cap. 
  4. Economic forecasts for major economies have been revised down since the war in Ukraine started and the risk of a global recession has increased significantly. This will negatively impact oil demand and weigh down on oil prices.

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