Oil Price: OPEC+ strikes the right note and keeps the supply unchanged

 

OPEC+ meeting December 2021

The OPEC+ collectively decided not to act on impulse in the unprecedented circumstances, triggered off by the outbreak of the Omicron variant of the Coronavirus.

No sooner was it announced than it was well received by the beleaguered consumers across the world, especially when the risk of yet another outbreak of the Coronavirus is on the horizon; the relief resonated with the global community regardless of the obvious wealth disparities, because the rising energy prices have been causing major problems on many fronts, which could eventually hurt the producers too.

The ministerial meeting of the OPEC+ ended today, having decided to keep the existing policy unchanged; that means, the addition of extra 400,000 barrels per day to the crude oil markets in January will go ahead as previously planned.

Up until the last minute, most analysts thought that the OPEC+ would curtail the crude oil output in light of falling crude oil prices, due to the combined impact of the outbreak of the new variant of the Coronavirus and the joint release of the strategic petroleum reserves, SPRs, by world’s major consumer nations led by the US.

Those who advocated retaliatory measures wanted the cartel to cut down on planned increase in output, promised a few months ago. The oil producers of the group, however, decided that the time was not ripe for tit-for-tat measures, especially when the pandemic started staring at the global economy – once again.

In short, rocking the boat at a time like this is in no one’s interest.

The outcome is a diplomatic success for all the parties involved too, especially when there is no such a thing in Vienna, the Austrian capital, from the current talks over the JCPOA, 2015 Iranian nuclear deal.

At the time of writing this, the two sides are as far apart as they were months before with mutual distrust being blatantly on display.

The steady contribution of the crude oil made by the OPEC+ implies that the arrival of Iranian oil to the crude oil markets is still a distant dream, despite the optimism of the Iranian oil producers.

With the new development, the price of crude oil may fluctuate between $60 and $70 a barrel in such a way that the global consumers can breathe a sigh of relief – at a very difficult and challenging time.

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