Oil price swing continues. Here’s what you need to know
Let’s talk about oil. On Wednesday, the Organization of the Petroleum Exporting Countries (OPEC+) met for a total of 13 minutes.
And on Thursday, the head of the International Energy Agency (IEA) – which represents the United States and other major oil-consuming economies – said to reporters: “In a word, it was disappointing. I think we’ll leave it at that.”
Oil prices are still swinging around, reaching US$120 per barrel at one point. The IEA has already coordinated an international oil sale to try to calm the prices down.
From OPEC+’s perspective, according to a delegate, the group looks at the fundamentals of the supply and demand of oil in the global market, and none of the sanctions imposed by the West have really targeted energy. This is even though there are calls from US lawmakers to officially ban Russian oil. And so, because of that and how the group doesn’t look at geopolitics, right now they don’t see a need to add oil to the market.
But even though Russian energy isn’t under direct sanctions, people are scared to go near it. For example, some Russian oil didn’t get any bids when it went on sale on Tuesday, even though it was heavily discounted. The fear for everyone is that they will at some point encounter sanctions, or they’ll get “canceled” for doing business with Russia.
The next OPEC+ meeting is on March 31, and people think that if Russian oil exports and production are low at the next meeting, the sentiment might be different.
Meanwhile, Russia’s second-largest oil producer Lukoil PJSC said on its site, “We fully support its resolution through negotiations.”
This comes after many international energy companies have left Russia and halted joint ventures with Russian state-run energy companies.
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