Expert: Oil price may rise due to geopolitical events

Baku.26 September. REPORT.AZ / An increase in oil price to a three-digit amount per barrel may be caused by geopolitical reasons, Oil and Gas Management Programme Director at  Royal Docks School of Business and Law, University of East London Slavomir Raszewski said.

He thinks that despite the political pressure on the largest OPEC producer, Saudi Arabia, and oil producers in the Middle East, in general, the Kingdom of Saudi Arabia has no desire to increase oil production. "Moreover, OPEC with its historical role as the oil cartel largely decreased in the recent decades due to production in non-OPEC countries, in particular, due to US shale deposits, is currently coordinating quotas for oil production with non-OPEC producers, primarily with the Russian Federation," the expert added.

According to Slavomir Raszewski, all these factors including anti-Iranian and a new wave of anti-Russian sanctions, which the US is expected to introduce in November, create an even more complex picture of oil prices on the international markets. 

He said two factors will determine how long the oil prices will further grow: "First, it depends on how quickly the oil markets will fill the gap caused by the declining attractiveness of Iranian oil to buyers due to sanctions. Secondly, how far the conflict between the US and Russia will go. Both factors are highly dependent on geopolitics and future prospects."

The expert believes that the consequences of anti-Iranian sanctions will be strong, since the oil volumes are dropping significantly on the international oil markets. However, smaller output creates opportunities for other players in the oil market who can increase their production and sell more.

Oil and Gas Management Programme Director at Royal Docks School of Business and Law, University of East London Slavomir Raszewski

We can approach the three-digit price per barrel due to geopolitical events that are still ahead. Therefore, whether the oil price will reach $100 depends not only on the cycles of supply and demand but also on the political decisions to be taken by the leaders of Saudi Arabia, the United States and Russia in the coming months.

Slavomir Raşevski

Ekspert Slavomir Raşevski