Key highlights from the discussion:
- 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.
- 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.
- 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.
- 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.
“Russia’s oil is in long-term decline – and the war has only added to the problem“, Dr Carole Nakhle, Jul 2022
“Energy Sanctions and the Global Economy: Mandated vs Unilateral Sanctions“, Christof Rühl, May 2022
“Sanctions and the Economic Consequences of Higher Oil Prices“, Christof Rühl, Apr 2022
“Biden set sights on pledge for more oil from Gulf allies“, Dr Carole Nakhle, Jul 2022
“OPEC+ alone can’t fix Joe Biden’s oil problem“, Dr Carole Nakhle, Jul 2022
“OPEC, Oil Prices, and the US: Reasons for, and Solutions to, the Current Crisis“, Dr Carole Nakhle, Jun 2022
“Could Iran and Venezuela Help Biden’s Gas Crisis?“, Dr Carole Nakhle, Jun 2022