BAKU, Azerbaijan, Aug.1. OPEC+ won’t abandon oil quotas publicly, Sam Barden, Director of SBI Markets, an international commodity trading and advisory company, told Trend.
"I don’t think they will abandon them publicly, but privately I think they already have. What do I mean by this? Publicly, it will be important to keep quotas as this gives the market comfort that there is actually some market order and coordination in oil prices and deliveries. It also keeps OPEC relevant. If OPEC totally abandons quotas publicly, it will be very difficult to re-establish market control in the future for the cartel and their relevance would come into question. I think global markets look to OPEC for some form of control, even if they say differently," he added.
Barden noted that currently, there is a two-tier oil and gas market.
"We have one price for all the western nations who remain under the control of the USD, and we have a lower price for everyone else. USD sanctions is the direct cause of this higher price in Western Nations (Europe, USA, Australia etc)," the expert said, adding that western states would experience large scale social unrest if their public actually understood that sanctions is the main cause for their energy pricing pain.
"So, it’s not the quitting of quotas as much as the quitting of the USD that seems to be affecting oil prices. Currently Russia is selling large amounts of cargoes to Asia, with tankers going "dark" to transfer oil cargoes. Saudi is selling to China in yuan. I think there is high levels of co-ordination amongst OPEC, but it’s not quotas they are quitting, it’s the USD," he concluded.
The next OPEC+ meeting is expected to be held on Aug.3.
---
Follow the author on Twitter: @Lyaman_Zeyn