Key points discussed:
- Since July, oil prices have been on an overall downward trend.
- While a reversal to this trend is possible, the main feature of the oil market is that of continued volatility.
- The economic outlook of major economies will largely dictate the direction of prices. In case of a persistent decrease of prices, OPEC+ would have to eventually resume cutting oil production.
- A price cap on Russian oil by the G7 countries is only effective when it is imposed at a significantly lower level from what Russian oil is currently being traded. Another prerequisite is involving major oil consumers such as China and India for the cap to be effective- an issue which is still not resolved to date.
“Russia’s oil is in long-term decline – and the war has only added to the problem“, Dr Carole Nakhle, Jul 2022
“Russian oil sales unexpectedly supported by the Middle East“, Dr Carole Nakhle, Aug 2022
“OPEC+ warns of limited investment in the oil and gas sector“, Dr Carole Nakhle, Aug 2022