Will geopolitical risks rise and the oil crisis will happen again? US President Trump withdrew from the Iranian nuclear deal in May. United States recently consider sanction Saudi Arabia because of the disappearance of the “Washington Post” reporter. In the US President Trump threatened to punish severe punishment and after its entry into force in November. Saudi Arabia also responded with a tough response, and he will not hesitate to take the global economy to bury, so that the price of oil should be 200 dollars a barrel or even multiples. There is quite a sense of using "oil weapons" again.
Global oil prices hit a four-year high. OPEC promised to keep production steady. Investors believe that U.S. sanctions against Iran and outages in Venezuela will lead to supply shortages. The market has also expected oil prices to return to $100/b.
Will history repeat?
The US economy and financial markets are once again in a relatively low stage. In other parts of the world, the economic outlook is waning. Although oil consumption is growing strongly, demand may gradually decrease. The signal to the oil crisis is much slower than in other markets, and the curve often shows deviations.
The new environmental regulations will reduce sulfur demand for marine fuels from 2020, which will put pressure on the supply of medium and low sulfur crude oil.
Oil prices will continue to climb until demand is clear, or rising oil prices force The Organization of the Petroleum Exporting Countries (OPEC) and its allies to take action. This time, oil prices will continue to rise until there are clear signs that oil consumption growth is slowing, or that Saudi Arabia and Russia's production policies or US government sanctions have been adjusted.
If oil production cuts beyond expectations, or if terrorist attacks, political turmoil, such as the recurrence of turmoil or hurricanes in Venezuela, war threats in oil-exporting areas, refinery shutdowns, or Canadian hill-fires, the supply of crude oil is due to these accidents. Factors causing crude oil production to fall more than expected, oil prices may continue to rise. If these extreme factors are removed, Venezuela and Nigeria, which are affected by human factors, are rapidly returning to production, and the factors that reduce sanctions against Iran are lower than market expectations. Moreover, the release of the US strategic oil, the oil price will start to decline.
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