Oxford Energy Podcast – Oil Market Recovery and the Balance of Risks

The oil price continues to shrug off many of the downside risks and Brent remains well supported, breaking out from the $40-$45/barrel price range and recently trading above $48/barrel. This is remarkable considering the mix of bearish factors (renewed mobility restrictions and lockdowns, the return of Libyan barrels, easing of China’s imports, the potential return of Iranian barrels, uncertainty about the next move for OPEC+, the large buffers in the system) and bullish factors (positive news about the vaccines, robust Asian demand, high OPEC+ compliance). In this podcast David Ledesma discusses with Bassam Fattouh his latest paper with Andreas Economou: Oil Market Recovery and Balance of Risks. How has the oil market been faring with the renewed restrictions and lockdowns? How have refineries been coping with the uneven impact of the shock? What are the main risks from the supply side? How have oil relations between Saudi Arabia and Russia evolved since the breakup of the OPEC+ agreement in March 2020? Is OPEC+ cohesion at risk? What about the potential return of Iran production now that Biden has won the US elections?  Will OPEC+ accommodate the potential return of Iranian barrels? How serious is the ‘missing barrels’ issue? What options do OPEC+ face?

By: OIES