We’ve been asked if the current oil market is similar to that of the 1970s oil price crisis. While some similarities exist, we find that the differences are far more significant, particularly when thinking about the medium-term outlook.

Brent crude moved back above $110 per barrel last week, which prompted questions about whether current oil prices pose a threat to the global economy. The short answer is no.

The world is awash in stories and headlines about the pandemic, inflation and central banks poised to raise interest rates, yet the global oil balance is tightening and upward pressure on oil prices is intensifying.

About 11 years ago, the US Department of Defense formed a small commission that was charged with assessing the potential for resource conflict.

We have maintained a very bullish outlook for the oil market. Essentially, we forecast that global oil demand will see an eventual (and full) rebound from negative pandemic-induced effects, but that non-OPEC oil supply will not see a commensurate recovery. Let us talk about the “why.”

OPEC+’s decision last week (in near-record time) to maintain the quota roll-down was largely expected, and there were no wrinkles to speak of.

When OPEC+ convenes this week, it will take up the task of evaluating the state of the global oil balance.