Oil markets mildly react to the Saudi’s 1 Mb/d cut

In this interview given to Nour Amache and Alaa Joudi from Asharq Business Bloomberg, Dr Carole Nakhle, CEO of Crystol Energy, comments on the outcome of the OPEC+ meeting that took place on 4 June 2023.

Dr Carole Nakhle discusses the outcome of the OPEC+ meeting that took place on 4 June 2023 with Nour Amache and Alaa Joudi from Asharq Business Bloomberg

Key takeaways:

  1. Saudi Arabia’s announcement of a voluntary 1 million barrels per day (Mb/d) cut for the month of July didn’t cause a major disruption in oil markets. That was partly because a cut was expected after OPEC+ meeting and partly because the size of the cut was not dramatic.
  2. OPEC+ is not the sole player in the oil markets; if it was, oil would have been trading at much higher levels than what we are currently seeing.
  3. Oil demand is still the least understood variable and is driven by a myriad of factors including the global economic outlook, the monetary policies adopted in key economies, and the reaction to prices.
  4. African member countries of OPEC, such as Nigeria and Angola, have been struggling in raising their oil production levels due to the lack of investment in their domestic oil sector.
  5. One of the interesting outcomes of the meeting is the possibility of revising Russian baseline production downward. Since the formation of OPEC+, Russia has not always delivered on its promises.

Watch the interview (in Arabic)

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