- World oil demand has exceeded supply. OECD oil inventories are drained to their lowest level in seven years. Spare crude oil production capacity is falling, and OPEC+ is unable to meet supply targets owing to eroded production capacity in some member countries.
- Add into this mix the confrontation over Ukraine and the possibility of a new Iranian nuclear deal. The geopolitical impact on oil prices is rarely so vivid or potentially far-reaching.
- In the near term, panic and disruption in markets are possible if severe financial and economic sanctions are placed on Russia - even if oil exports are not explicitly targeted by Western sanctions.
For further details see:
When Will Oil Supply Catch Up With Demand - And Will Geopolitics Help Or Hurt?