The Organisation of Petroleum Exporting Countries (OPEC) has said despite its efforts at preventing any disruption to energy flows, the ongoing crises in Russia and Ukraine have triggered a reasonable degree of anxiety and uncertainty in the global energy market.
Secretary-General Dr Mohammad Sanusi Barkindo expressed the fears in his opening remarks at the 60th Meeting (Videoconference) of the Joint Technical Committee.
He said: “Despite ongoing efforts and assurances to avoid any disruption to energy flows, the unfolding geopolitical developments have prompted significant anxiety and uncertainty.”
According to him, these conditions are amplified by low commercial oil stock levels, which currently stand at 250 mb below 2015-2019 levels.
The scribe added that high over-conformity levels (129% in January 2022) at a time of steady upward adjustments in crude oil production by DoC participating countries, and shrinking spare capacity (currently at around 3.3 mb/d in only a few countries) have intensified perceptions of vulnerability and a tightening global oil market.
In light of the significant volatility in the market and the potential impacts on the balance of oil supply and demand, Barkindo promised that “we will pay considerable attention in today’s meeting to potential scenarios for the future development of the oil market going forward.”
According to him, in recent days, OPEC has seen escalating geopolitical tensions, which are having adverse effects on energy markets across the world and resulting in heightened levels of volatility.
He said moreover, this crisis is expected to have broader political and economic repercussions at the global level.
This rising tension, Barkindo said “has spooked investors and rattled the commodity markets, particularly given the potential impacts on oil and gas supply as trade and financial sanctions continue to be imposed with each passing day by governments in reaction to the crisis.
OPEC, he said, is still forecasting healthy economic growth this year at 4.2%, following a strong rebound at 5.6% in 2021.
Continuing, Barkindo said: “In terms of demand, we foresee world oil demand increasing by 4.2 mb/d in 2022, following growth of 5.7 mb/d in 2021, unchanged from last month.
Source: The Nation