Oil markets and geopolitics

In this interview given to Hafida El Bouchari from Sky News Arabia, Dr. Carole Nahkle, CEO of Crystol Energy, discusses the impact of geopolitics on oil markets.

Dr Carole Nakhle discusses the impact of geopolitics on oil markets in this interview with Sky News Arabia

Key takeaways:

– While the geopolitical factor has always played a role in determining the direction of global oil prices, it cannot be viewed in isolation of other market fundamentals.

– In the current market circumstances, geopolitical tensions have not resulted in a loss of oil supplies and therefore their impact is currently limited until proven otherwise.

– At the same time, OPEC holds spare capacity above its long-term averages therefore providing a cushion against potential supply disruptions. 

– On the demand side, the global economic outlook remains uncertain. This uncertainty stems partly from the lack of a clear policy direction regarding interest rate reduction by the US Federal Reserve. Additionally, the Chinese economic recovery post-COVID is precarious due to the structural issues plaguing the domestic real estate sector.

– The implications of the Red Sea disruptions include increased transit costs and longer transit times.

Related Analysis

Oil markets: Relative stability amid geopolitical strife“, Dr Carole Nakhle, Feb 2024

Asia’s energy market: The new global epicenter“, Dr Carole Nakhle, Dec 2023

A rising China is reshaping global energy markets“, Dr Carole Nakhle, Nov 2023

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