The global energy market is facing recession fears, and expecting a potential downtrend in the prices of gasoline while the OPEC+ countries had agreed on a sharp cut in oil production at a meeting on Monday. The experts suggest that multiple global political issues and economic policies of major powers had created an environment of fear and uncertainty in the global energy markets that is likely to exacerbate the current crisis. Earlier, the Energy Minister of KSA, Abdulaziz bin Salman sensitized the world about the looming risk and noted that volatility and thin liquidity send erroneous signals to markets at times when clarity is most needed.
The global political system and rivalry between the major powers have completely politicized the international economic market and continuously created crises in the world which is a major reason for global price hikes and shortage of essential commodities in various parts of the world. Particularly, energy has become a lethal weapon for the major oil producers and global players who are ruthlessly using this tool to steer their strategic interests through nefarious economic and administrative policies.
Presently, the 13 OPEC members led by Saudi Arabia, and their 10 none OPEC partners led by Russia, agreed to adjust their quotas for October. According to the reports, the bloc decided to cut its oil production by 100,000 barrels per day while the group also agreed on another meeting in the coming weeks to increase the prices of their commodity. Whereas, the US-Russia rivalry and potential revival of the Iran nuclear deal are other important factors that would have far-reaching effects on the global oil trade.
Historically, OPEC Plus had been resisting the Western calls to open its taps more widely to contain soaring prices in the world, but the cartel mostly stuck to its profitable business. Recently, the G7 countries decided to cap the price of Russian oil, limit Moscow’s earnings from the sale of hydrocarbon reserves as well as curb its war hostilities against Ukraine. Meanwhile, Russia has warned that it will no longer sell oil to countries that are a part of western manoeuvre against Russian energy projects.
Western governments have been intervening in the global oil market and trying to manage the oil trade since the start of the war in Ukraine while energy deficit European Nations are a part of the G7 campaign to cap prices of Russian oil that have further expanded Russia-west rivalry in the economic field. Currently, economists are forecasting the revival of the Iran nuclear deal as a game changer in the energy sectors because Iranian crude could tip the balance in the market in favour of supply and will lead to a significant reduction in the price of petroleum products globally.
Although, global energy producers, oil traders and brokers have grabbed unimaginable benefits in the past by the use of their nefarious tools and tactics however their divergent interests had made them staunch opponents. Their alliance has ruined the global economy and devastated the poor, while their enmity will hurt the world in other ways.