BAKU, Azerbaijan, Nov.26
By Leman Zeynalova – Trend:
The release of Strategic Petroleum Reserve volumes by USA, China, India, South Korea and Japan, are not going to result directly in a market share fight, Cyril Widdershoven, a Middle East geopolitical specialist and energy analyst, a partner at Dutch risk consultancy VEROCY, and Global Head Strategy Risk at Berry Commodities told Trend.
On 23 November, US President Biden announced the release of 50 million barrels (mbbl) of crude oil from the US SPR.
“At present, all these countries are depending on possible volumes of OPEC+ and others to counter growing demand. At the same time, the total volumes of SPR releases, which is lower than 100 million barrels is just less than 1 day of global demand, while it is also being spread over a couple of weeks. Impact will be almost negligible. You even could say the SPR threat is minimal, and will ultimately even push prices up as markets already had factored it in. The market even was expected much more, so current measures are disappointing,” said the expert.
Widdershoven pointed out that OPEC actions will be minimal at present maybe some delays in export expansion will be discussed the coming days, but several OPEC+ members even want to increase their volumes to higher levels.
“Don’t expect very harsh measures, only a possible delay of stated increases could be an option. At present the market is in balance, as enough oil and products on markets. However, possible threats are there, such as COVID issues, which will push demand maybe down, or lack of investments which will push prices up. At same time, OPEC members are struggling to even put enough crude in markets as was agreed last months. Only UAE, Saudi and some others are able to,” added the expert.
---
Follow the author on Twitter: @Lyaman_Zeyn