Crude oil markets have been anxious ahead of the
OPEC+ meeting, perhaps, anticipating an increase in output by the member
nations.
The natural inertia, given the current crude oil
price, is to let it stay where it is by justifying it on the ground of covering
past losses and getting the investment back on track.
The statement attributed to Oman’s oil minister on
the eve of the latest OPEC+ meeting reflects the mood of some of the members,
if not all; not only does he say that the current price is fair, but also
welcomes the re-entry of Iran into the markets, despite the talks on the JCPOA
remaining in limbo.
Of course, the price of crude oil has been rising
last three weeks and the producers are cashing in on the fortune. At the same
time, they want to sell as much as possible and make hay while the sun shines.
Russia, along with some of its neighbours, for instance, holds this view, yet
respects the collective outcome that stems from ministerial discussions.
The recent forecasts of demand of the crude oil have
been consistently upward. The unexpected flare-ups of the Delta variant of the
Coronavirus, even in places where there were successful vaccine rollouts, however,
have put a damper on the momentum of both the revival of the demand and of
course, the price.
Closer to home, as far as the producers in the
Middle East are concerned, the pandemic is spreading like wild fire in
Indonesia, Malaysia, Thailand and many Asian countries. Even in India, the medical
experts now talk about the emergence of a new variant, Delta+.
The relations between the countries in Asia and the
Middle East are much more than those stem from business dealings; they are
traditional and date back hundreds of years. In short, the oil producers will
not ignore their pain during a very difficult time.
Saudi Arabia, along with the UAE, for instance, have
reduced the price of oil twice in the past for Asia, while being fully aware of
the fact that some of the exports end up in storage facilities to be used on ‘rainy
days’.
In this context, OPEC+ may agree to increase the
output in the coming months as a way of helping the Asian nations in
particular, and the world in general.
Since the arrival oil from Iran is still a distant
reality, the members of the OPEC+ can eliminate one anxiety from a catalogue of
them, while doing the calculations.
The OPEC+ knows how fragile the global economic
outlook is at the moment, as we cannot say the pandemic is behind us – yet. In this
context, the member nations cannot afford to be seen insensitive when plenty of
nations still struggle to come to terms with the severe blow dealt by the
pandemic.
