Dr Nakhle stresses that there have not been major changes to market fundamentals which could drive the organisation away from the decision it took in July to put 400,000 barrels per month by the end of the year.
While there has been some pressure from major oil importing countries, like Japan and India, she highlights that the pressure coming from the US is a political game with the Biden administration trying to find someone to blame for the increasing prices consumers face at the pump stations.
She further adds that the US position is not clear cut today. One should not forget that the country, in addition to being the largest consuming country, is the world’s biggest oil producer, and when oil prices are high, the US industry benefits with positive spillovers to the rest of the economy including through increasing hiring and paying more taxes.
Dr Nakhle also comments on COP26, arguing that the latter’s success, like beauty, is in the eyes of the beholder. Climate activists might think that not much has been achieved compared to where they would like to see things going, but there are others who believe that there has been progress, especially compared to previous meetings. There have been some interesting pledges, including the commitment of 40 countries to phase out coal in power generation, which is an important factor because coal is the largest emitter of CO2 compared to oil and gas.
However, the devil remains in the details, and especially when it comes to the implementation of these pledges, how the progress is quantified and above all governance which is yet to receive the attention it deserves.
Watch the full discussion:
“Oil prices and the US dilemma“, Dr Carole Nakhle, Nov 2021
“Global Economy and Energy Markets Weekly Commentary – 31st Oct ‘21“, Christof Rühl, Oct 2021