Biden set sights on pledge for more oil from Gulf allies

In this interview with Manus Cranny and Dani Burger from Bloomberg, Dr Carole Nakhle, CEO of Crystol Energy, comments on the latest developments in oil and gas markets.

Dr Carole Nakhle (center) discussing the latest developments with Manus Cranny and Dani Burger from Bloomberg

Some of the main points covered during the interview:

  • Despite the growth in LNG, gas markets remain regional. Germany is still significantly exposed to Russia given the lack of immediately available alternatives – the main reason why the European Union hasn’t sanctioned Russian gas yet.
  • Energy prices are feeding into inflation, and many believe a recession is inevitable.
  • A price cap on Russian oil is a simple and appealing concept but its execution, especially by several countries, is fraught with complexity. Besides, there are many ‘ifs’ to make it work including assuming that Russia would not retaliate by cutting supplies. Additionally, other large buyers of Russian oil, such as China and India, must be brought on board for the cap to become effective.
  • Russia is an important player for the longevity of OPEC+ and its impact on the market. The country is producing more than double of what the second largest producer in OPEC (Iraq) is producing. Although OPEC+ might suspend Russia’s quotas in the group, it would be hard for the organisation to turn its back to an important member such as Russia to the dismay of the West. 

Related Analysis

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

Energy Markets and the Design of Sanctions on Russia“, Christof Rühl, Mar 2022

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