Despite the US’s authorization to release 180 million barrels from the Strategic Petroleum Reserve, Saudi Arabia and the UAE have kept to their OPEC+ commitments to increase production by 400kbd per month to support their domestic industries.
Politics does play a greater role in decision-making now, but Saudi Arabia and the UAE are more inclined to act in their own national interests.
High oil prices provide for critical upstream investment which has slowed on a global scale, leading to the current supply crunch. These high prices support efforts to extend the lifespan of their hydrocarbon-based economies, despite the fact that consuming countries still rely on hydrocarbons.
The Russia-Ukraine crisis highlights the extent to which consuming countries still rely on hydrocarbons, despite net-zero and climate-related pledges, and how OPEC+ is the best way of managing the current crisis.
Although the worst of the COVID-19 pandemic appears to be over, the spectre of the pandemic continues to shape OPEC+ policy.
The Saudis and the Emiratis will not make sudden movements which could sharpen the inclines and declines of oil price volatility.
A report that Russia may cut military operations near Kyiv has brought down the oil price from $114 to $107 a barrel.