In this commentary to the Gulf Intelligence, Dr Carole Nakhle, CEO of Crystol Energy, reflects on how tariffs, oil prices, and spare capacity are shaping OPEC+’s strategy.
Tariffs losing their shock factor
According to Dr Nakhle, tariffs no longer deliver the same market disruption they once did. When President Trump revived his tariff agenda in April, markets reacted with volatility. But subsequent delays, adjustments, and ongoing negotiations have dulled the impact. While trade tensions remain a drag on global growth—as underscored by downgraded OECD and IMF forecasts—markets are now conditioned to political unpredictability. Slower growth, she notes, directly undermines oil demand, which helps explain why prices remain stagnant around $70 per barrel despite the summer demand surge.
$70 oil: sustainable but not ideal
Dr Nakhle points out that while $70 oil is better than the feared $40–$50 range, it is still below the fiscal needs of many producers. Current OPEC+ supply increases largely reflect regularisation of output, not fresh barrels. For some, it is about reclaiming lost market share rather than adding significant new supply. The group refers to market conditions as “healthy,” but Dr Nakhle cautions this is more about managing expectations than declaring a win.
Spare capacity: strategy over volume
On spare capacity, Dr Nakhle stresses that not all announced commitments represent real barrels. Countries like Saudi Arabia still hold significant capacity that could be deployed, but volume is only part of the equation. Timing, revenue objectives, and long-term positioning matter just as much. For now, summer demand offers some room to manoeuvre without depressing prices further. But whether OPEC+ continues to increase supply will depend on how comfortable producers are with current prices and how they balance market fundamentals with geopolitical signals.
Dr Nakhle was joined by Omar Al-Ubaydi, Director of Research at the Bahrain Center for Strategic, International and Energy Studies and Peter McGuire, CEO of Australia Trading.com. Sean Evers from Gulf Intelligence moderated the discussion.
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