Oil prices rise despite OPEC+ production increases due to geopolitical factors

VIENNA, June 5 (KUNA) -- The continued rise in crude oil prices, despite the OPEC+ alliance's announcement of a production increase, is due to a number of geopolitical and economic factors that hinder market stability, said Economic and Financial Expert Dr. Bashir Aliya.
In remarks to KUNA Thursday, Dr. Aliya affirmed that markets did not react to the OPEC Plus announcement as expected, as prices continued to rise instead of declining.
He noted that the oil market did not respond to the announcement because the increase announced by OPEC+ was limited and viewed as merely a conditional gradual easing, which maintained a state of anticipation and anxiety in the markets.
Markets are not satisfied with promises or partial announcements, but are also affected by actual developments and concerns about future supplies, he added.
Dr. Aliya stressed that a number of geopolitical factors reinforce the belief that supply may not be sufficient in the coming months, even with increased OPEC+ production, pointing out that these factors include escalating tensions in the Middle East and the Red Sea, and the accompanying potential closure of the Bab Al-Mandab Strait, through which a significant portion of Gulf oil and gas exports pass.
He also noted that continued sanctions on Russia and the possibility of new restrictions on its oil sector would reduce its ability to export crude, putting pressure on global supply as well as the stalled nuclear negotiations between the US and Iran are increasing market uncertainty due to the absence of Iranian oil from the markets.
OPEC plus decision to increase production remains an important element, but it alone is not sufficient to stabilize the market, given the presence of several other factors that influence price trends, said Dr. Aliya. (end) amq.aa