OPEC+ makes perfectly correct diagnosis of Omicron impact on oil market

Baku, Azerbaijan, January 15

Written by Liman Zeynalova – Direction:

OPEC + quickly realized that Omicron would not have a strong and lasting impact on oil markets and prices and this diagnosis was absolutely correct Francis Perrin, Senior Fellow at the Policy Center for the New South (PCNS, Rabat) and at the French International Institute and Strategic Affairs (IRIS, Paris) for Trend .

Perrin believes that OPEC+’s decision to continue increasing oil production in February is wise.

“In a period of uncertainty, OPEC+ (23 countries, of which 13 are OPEC members) is achieving some much-needed stability and predictability through the roadmap approved in July 2021. This roadmap provides for a monthly increase in OPEC oil production. + by 400,000 The expert noted that since August 2021 this rise has been confirmed every month and will happen again in February 2022.”

Beren indicated that this stability is welcomed by the oil markets.

“On January 4, the price of Brent North Sea reached $80 per barrel for the first time since November 25, 2021, just before Omicron appeared on the world stage. OPEC+ quickly realized that this new alternative would not have a strong and lasting impact. On oil markets and prices And this diagnosis was absolutely correct, the global demand for oil may rise by between 3.3 million barrels per day and 4.15 million barrels per day in 2022 according to different forecasts (the first comes from the International Energy Agency and the second from OPEC. ), Which is interesting for producers. According to OPEC, global oil demand will reach 100.8 million barrels per day in 2022, which will be slightly higher than pre-pandemic levels (2019).

In terms of OPEC+’s strategy, it’s doing well so far, Brin added, noting that some caution is still needed in 2022.

“The COVID-19 pandemic remains a threat to the global economy; the global oil market is now in excess (global oil supply exceeds demand), which was not the case in 2021; and even if negotiations are very difficult a scenario of an interstate agreement cannot be ruled out. The United States and Iran over this country’s nuclear program, which will open the way for much higher oil production and export than Iran.As OPEC Secretary-General Muhammad Sanusi Barkindo rightly said: there is a need for OPEC+ to remain “very smart and adaptable to the ever-changing situation” Since April 2020, OPEC+ has proven that it has this capacity and this behavior has generated a lot of benefits for these 23 countries. It is very likely that OPEC+ will go this way in 2022.”

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