What will stop oil from surging to $180

What will stop oil from surging to $180

Only Saudi Arabia, the UAE, Kuwait, Iraq and Azerbaijan are in a position to boost their production to meet set Opec quotas while the other eight members are likely to struggle due to sharp declines in production and years of underinvestment

On 2 March, the Opec+ — an alliance of 23 oil producers including Opec members and Russia — agreed not to accelerate the previously agreed schedule of gradual production increases, despite soaring oil prices following Russia’s invasion of Ukraine. — File photo

Published: Mon 7 Mar 2022, 5:37 PM

Can non-Opec producers jump into the supply gap created in the wake of the Russian attack on Ukraine? If not, what will stop oil prices from rising to $180 per barrel, unleashing a worldwide recession?

These are the questions energy market analysts are seriously pondering while some have come out with the view that demand destruction caused by spiraling prices is now the only practical mechanism to rebalance the exceptionally tight oil market.

Since only a handful of Opec members have available spare production capacity and many non-Opec producers are also large consumers of crude oil, it is very unlikely that the gap created by the shortfall of supply from Russia could be offset in