Oil prices: the fate is not sealed

Key takeaways:

– Both the International Energy Agency (IEA) and OPEC agree on a robust oil demand growth and a tightening market particularly for the remainder of 2023.

– However, volatility in prices will continue given a wide range of uncertainties, including the economic outlook, monetary policy impact and the patchy recovery of the Chinese economy.

– High energy prices are not the root cause of inflation but contribute to the increase in the general price level.

– There is no doubt that energy transition is affecting all countries around the world. Progress to date is however slow as fossil fuels still account for more than 80% of the global energy mix. The IEA’s forecast that the demand for fossil fuels is likely to peak in the next ten years is one scenario that is based on certain policy assumptions which may well change.