Over time, the release of strategic reserves could be a more worrying development than Omicron for OPEC Plus. Previous coordinated releases were rare occurrences, in response to supply disruptions. The latest came in 2011, when the civil war in Libya disrupted the country’s oil supply.
This release, however, is, in fact, a protest against what oil-consuming countries perceive as excessively rapid price increases, at least in part because of artificial constraints on supplies by the Organization of the Petroleum Exporting Countries. and its allies.
“This is a complaint about prices which are” regulated “by the OPEC countries,” said Edward L. Morse, global head of commodity strategy at Citigroup, in a video message to customers. .
What OPEC can do about this development, however, remains to be seen.
Mr Morse and others say measures that once seemed unusual could become more mainstream as the world shifts from oil addiction to electric vehicles, for example – perhaps with new momentum given by the recent summit on the climate in Glasgow.
While countries like Saudi Arabia and the United Arab Emirates need healthy oil revenues to finance the diversification of their economies from oil to other forms of energy, high prices are also encouraging the shift away from oil, weakening the economy. asks over time.
“OPEC and the Saudis were able to manipulate the market with confidence in the oil monopoly on transport,” said Jim Krane, energy researcher at the Baker Institute at Rice University. “Now we are seeing substitutes emerging at the margins. Confidence in the longevity of oil is collapsing.