But with demand for crude surging as the impact of the pandemic fades, that no longer feels like the case.
OPEC+, which groups the Organization of the Petroleum Exporting Countries and allies like Russia, is once again flexing its muscle. The group’s refusal to accede to US President Joe Biden’s calls to boost output — a move that would have helped ease upward pressure on gasoline prices — precipitated the decision by the United States and other major energy-consuming nations last week to tap strategic oil reserves.
The episode displayed the group’s market power, even as the energy transition gathers pace. Demand for oil could peak soon if countries meet their net-zero emissions targets, but OPEC producers and Russia are quick to note it’s not going away entirely. Under climate pledges made through early October, the world is still expected to need 75 million barrels of oil per day by 2050, according to the International Energy Agency.
“This is definitely a period where OPEC and the wider OPEC+ group is finding it has a lot of influence over oil markets,” said Richard Bronze, head of geopolitics at the consultancy Energy Aspects.
When it comes to oil price dynamics, it’s hard to predict the future. Political or weather events can trigger a boom or fuel a huge drop. The pandemic adds to the uncertainty, especially as scientists race to assess the Omicron variant. Witness the more than 20% price crash in recent days that has taken US oil futures back to levels last seen…
