OPEC+ stalemate threatens the pandemic recovery
The International Energy Agency has warned that the failure by major oil producers to agree on supply increases could elevate fuel prices. The elevated prices of fuel would spark inflation and would slow nations’ recovery from the coronavirus pandemic. The agency expects oil markets to tighten as demand increases after the Covid-induced decrease in demand for oil.
The higher oil prices could accelerate the demand for greener forms of energy and transport, but will slow the economic recovery in many countries, especially developing nations. Oil prices already surged to multi-year highs last week due to the lack of agreement on boosting production. The price of Brent crude almost reached $78 a barrel, the highest level since October 2018. The market is likely to remain volatile until the OPEC+ production policy is clear.