Oil markets, OPEC+ and COP28

In this interview given to Altayeb Abed Al Majed from CNBC Arabia, Dr. Carole Nakhle, CEO of Crystol Energy, discusses the outlook for oil markets in 2024, the cohesion of OPEC+ following Angola’s departure and the impact of COP28 on energy investments.

Dr Carole Nakhle discusses the outlook for oil markets in 2024 in this interview with CNBC Arabia

Key takeaways:

– Had the same geopolitical tensions happen 10-15 years ago, we would have seen lasting spikes in oil prices. That hasn’t happened today despite OPEC+ cuts.

– The structural economic problems particularly in China have constrained growth in oil demand, and the increase in non-OPEC supply, led by the US, have put a downward pressure on oil prices. Additionally, the replenishment of the spare capacity largely due to OPEC+ cuts has dampened the geopolitical risk premium.

– The International Energy Agency (IEA) is more bearish than OPEC when it comes to global oil demand growth for 2024. OPEC expects 90% of global demand growth for oil in 2024 would come from Asia, led by China.

– Despite internal clashes between some members culminating in Angola’s departure, OPEC+ has been able to maintain discipline, otherwise oil prices would have been much lower than what they are currently.

– The outcomes of COP28 clearly reflect that the energy transition should be inclusive of all energy players and requires complementarity between various energy sources until green technology can be deployed at scale and with little government support.   

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