OPEC’s latest monthly report highlighted growing concerns about US energy policies increasing global market uncertainty. The group is also watching tariffs closely because they could negatively impact global oil demand growth this year. Another factor is Iranian oil output, which has rebounded considerably over the last four to five years. The US has made it clear that they want to reverse this trend by reimposing stricter measures on Iranian exports. If Washington follows through, it could create enough space in the market for OPEC+ to start easing production cuts without disrupting prices. However, they remain very cautious. Saudi Energy Minister Prince Abdulaziz bin Salman has emphasized that they need clear market signals before making any major moves. While OPEC has planned to gradually ease output cuts starting in April, they have also built in flexibility, they could start the process but then pause it if necessary. One critical factor here is their relationship with Trump. They don’t want to provoke him by delaying production increases again. Instead, they may initiate a modest increase, contingent on whether US pressure on Iran materializes. If it doesn’t, they can quickly pause or reverse course.
How might global energy flows adjust as we move toward a potential settlement in Ukraine?
The biggest shift will only happen once there is a definitive resolution to the conflict. Until then, European and US sanctions remain in place, and I don’t expect them to be gradually lifted as part of negotiations. This will likely be an all-or-nothing final decision. One of the key questions is whether Russian gas will return to Europe in a post-settlement scenario. Right now, European leaders insist that they won’t return to dependence on Russian energy. They’ve learned the risks of relying too heavily on Moscow. But I suspect that over time, market pressures and economic realities will gradually lead to a quiet resurgence of Russian gas imports. We’ve seen this pattern before – new administrations come into power, priorities shift, and suddenly, access to cheap Russian energy becomes appealing again.