Daily Management Review

IEA: China's influence on oil prices more important than decisions by Russia and OPEC


According to the chairman of the IEA, China's economy now influences oil prices more than those made by OPEC and Russia.

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International Energy Agency (IEA) executive director Fatih Birol says that although oil production curbs by Russia, Saudi Arabia, and other OPEC+ members may put more pressure on crude prices, China's economy continues to be the most significant determinant for the oil market.

“As usual, there are many uncertainties in the oil market, but if I had to choose one to focus on, it would be China. 60% of the 2 million bpd rise in global oil demand that we anticipate will come from China,” Birol said. 

President of the IEA believes that the market may become pessimistic if China's economy suffers or its growth is significantly less than that predicted by international economic organizations. Instead, according to Birol, OPEC+ production cuts will result in a tight market in the second half of the year if China's economy does not contract.

source: bloomberg.com