Oil prices ended with their first weekly decline in nine weeks, although the uncertainty surrounding Russia and Ukraine may change that.
In parallel, news emerged that Asian refineries are in cautious talks with Iran to resume oil imports if a deal is reached.
This value corresponds to about 0.9 percent of global demand and may increase the surplus estimate in 2022 to 1.6-1.7 million bpd.
Besides Iran, weekly Energy Information Administration statistics showed a continuous drawdown of crude oil inventories in Cushing, maintaining the trend seen in 2022 to date.
Meanwhile, the total US commercial crude stocks showed an unexpected increase of 1.1 million barrels, while stocks of petroleum products decreased by 2.9 million barrels.
The omicron variant, though it affects restrictions in some countries, has not led to major shutdowns.
OPEC is ready to increase production by 1 million bpd on an annual basis to 28.92 million bpd.
At the moment, the keyword in the market is “maybe.” The problem is that, lately, nothing is going according to plan.
The markets are understandably reacting to the news and pricing in the possibility of a nuclear deal and its consequences, but there are still many obstacles standing in the way of an agreement.
With all these developments, we must not forget Iran’s neighbors.
Solving the short-term problem of lowering oil prices from close to $100 a barrel could lead to another, much more serious problem within a year or two, or even before that, now everything in the world is changing rapidly.
He held senior analyst positions at OPEC, IEF in Riyadh, and OPEC FUND for International Development.