Since the late 1990s, China has been the big beast in the global oil markets, driving demand for oil and other commodities that it used to power double-digit economic growth every year for many years and then high single-figure growth for years after that.
Oil prices climbed on Monday morning after OPEC+ resolved on Sunday to stay the course on oil production cuts ahead of the implementation of a $60 price cap on Russian-origin crude oil negotiated by the EU, the G7, and Australia. OPEC+ had earlier agreed to cut output by two million bpd, about two per cent of world demand, from November until the end of 2023.
In November, Europe’s natural gas demand was 24% lower than the five-year average for the month, largely due to reduced industrial demand amid high prices.
OPEC+ yesterday decided to leave its production quotas where they are, at 2 million bpd lower than they were in October, which is an effective cut of 1 million bpd of production. Three days earlier, the European Union reached an agreement to set a price cap on Russian crude oil at $60 per barrel—lower than market prices but not as low as some EU members, such as Poland and Estonia, would have liked the cap to be.
The new drive for energy security prompted by the fossil fuel price crisis will accelerate the development of renewable energy, the International Energy Agency has said in a new report.
Russia will not export oil to countries that impose price caps even if production is cut, Russian Deputy Prime Minister Alexander Novak said on Russia state TV Sunday.
Russia has rejected a price cap on its oil, indicating it may stop supplying to countries that agree to the limit.
OPEC+ decided not to change the production quotas for its members at its latest meeting, which took place on Sunday.
Oil prices were steady on Monday after an agreement by the G7 group of nations and its allies to cap the price of Russian oil at US$60 a barrel.
As gas prices continue to fall, the coalition of oil-producing nations led by Saudi Arabia and Russia on Sunday opted against trying to stop the slide with cuts to the world’s oil supply.