Global Economy and Energy Markets Weekly Commentary – 28 Feb ‘25

In this commentary to the Gulf Intelligence, Dr Carole Nakhle, CEO of Crystol Energy, examines the shifting landscape of climate policies, OPEC+ production decisions, and the resilience of oil markets to geopolitical risks.

According to Dr. Carole Nakhle, the momentum behind aggressive climate policies has eased since the pandemic, with energy affordability and economic concerns now taking priority. Even the European Commission, once at the forefront of ambitious climate action, has adjusted its stance, acknowledging that the energy transition is more costly than initially projected. While claims persist that green energy is cheaper than fossil fuels, Dr. Nakhle emphasizes that the reality depends on how costs are measured—whether across the full supply chain or within select segments of electricity production. However, she notes that this doesn’t signal a complete reversal. Even in the U.S., where a potential Trump return could shift policy direction, climate targets are not being abandoned. Instead, the discussion has become more nuanced, moving away from the polarized rhetoric of previous years.

On OPEC+, Dr. Nakhle highlights the complex decision-making landscape shaped by economic and geopolitical uncertainties. She points to the Trump administration’s tariff policies, which introduce macroeconomic instability, with the potential for trade tensions to escalate into a broader conflict that could weaken global growth. This is particularly critical given China’s structural economic challenges, which already weigh on demand. Under such conditions, she suggests that OPEC+ may reassess its April decision, opting for a measured approach to production adjustments. Incremental changes could offer flexibility, particularly as additional sanctions on Venezuela and Iran introduce further supply-side constraints.