- One has to distinguish between the optics and the facts. Since the majority of OPEC+ members have been producing below their allocated quotas, less than 2 Mb/d will actually be taken from the market. Still, the volume of the cut is sizeable and has put an upward pressure on prices, spelling bad news for consumers around the world.
- The decision has political implications, particularly given its timing ahead of the mid-term elections in the US, where gasoline prices have negatively affected President Biden’s popularity. It, therefore, won’t be surprising if we hear condemnation from the White House and the NOPEC bill resurfaces.
- Russia is an important member for the longevity and influence of OPEC+. An increase in oil prices would benefit Russia, just at a time when European sanctions on oil trade become effective.
Watch the discussion:
“Russia’s oil is in long-term decline – and the war has only added to the problem“, Dr Carole Nakhle, Jul 2022
“Global Economy and Energy Markets Weekly Commentary – 13th Oct ’22“, Dr Carole Nakhle, Oct 2022
“Global Economy and Energy Markets Weekly Commentary – 9th Oct ’22“, Christof Rühl, Oct 2022
“Is OPEC+’s decision balancing the market?“, Dr Carole Nakhle, Oct 2022
“The impact of OPEC+’s decision“, Dr Carole Nakhle, Oct 2022
“Russia gets some help from OPEC+“, Dr Carole Nakhle, Oct 2022