OPEC+, Caution Amid Omicron Demand Shock

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Hwang Junho] The Organization of the Petroleum Exporting Countries (OPEC) and the coalition of major oil-producing countries including Russia, known as OPEC Plus (+), are reportedly set to discuss the impact of the new COVID-19 variant Omicron on oil demand.

According to foreign media on the 28th, OPEC+ plans to discuss this issue at the production increase meeting scheduled for the 2nd of next month (local time).

OPEC+ is paying close attention to the possibility that oil demand may be hit as countries impose travel restrictions following the emergence of Omicron. According to Bloomberg, a U.S. economic news agency, Mike Muller, head of Asia at commodity brokerage Vitol, diagnosed signs of declining oil demand in some markets centered on Asia and Europe. The OPEC+ delegation was already in a situation to reconsider the production increase plan due to oversupply, especially after the U.S. and others decided to release strategic reserves.

Meanwhile, on the 26th (Eastern Time), the day Omicron was officially announced, the January West Texas Intermediate (WTI) crude oil price on the New York Mercantile Exchange closed at $68.15 per barrel, down $10.24 (13.06%) from the previous session. This marked the largest daily drop since April last year. Brent crude prices also fell $8.77 (10.7%) to $73.45 per barrel on the same day.

This content was produced with the assistance of AI translation services.