Dr Nakhle argues that the announcement did not come as a surprise as the organisation has iterated that there are no structural changes in the oil market fundamentals to justify a change in strategy. In addition, the announcement of the 1 Mb/d release from the US Strategic Petroleum Reserve (SPR) for 180 days and the slowing economic activity as a result of Covid restrictions in China are weighing down on the outlook for oil demand growth.
She adds that Russia is searching for allies in trade, economics and politics and, thus, wants to maintain a good relationship with OPEC, which is no stranger to members with opposing political stances let alone at war with each other (Iran & Iraq, Iraq & Kuwait). OPEC+ will come under greater pressure the more the war in Ukraine worsens.
“Energy Markets and the Design of Sanctions on Russia“, Christof Rühl, Mar 2022
“No endgame for Ukraine“, Christof Rühl, Feb 2022
“Energy Market Dynamics“, Dr Carole Nakhle, Mar 2022
“The EU’s 4th round of sanctions on Russia“, Dr Carole Nakhle, Mar 2022
“Can Europe completely cut its reliance on Russian energy supplies?“, Dr Carole Nakhle, Mar 2022