Opec secretary general Mohammed Barkindo dismissed the risks posed to the global oil markets from the escalating trade war between the US and China saying the impact had been “exaggerated”.
“There's a lot of hype there in the market. The export numbers from China, for example, for the month of August came down by 1 per cent but we have lost in the oil market ten times from the beginning of this trade dispute until now,” he told reporters in Abu Dhabi.
"Even delays in the meetings of the negotiators have impacts on prices because of the increasing interconnection between the oil and the financial markets,” he added.
His comments echo the sentiments voiced by the new Saudi energy minister and de facto leader of Opec, Prince Abdulaziz bin Salman Al Saud, who said the markets were primarily driven by “negative sentiment”.
He said he did not believe that the tensions between Washington and Beijing, which escalated in tit-for-tariffs slapped on hundreds of billions of dollars of goods, including US crude, were not resolvable.
"They are projecting a recession subject to a possible trade war. Where is it? Do you really believe [the] US and China and those other countries involved would not have the wisdom and sensibility to try to overcome these issues without impacting the [global] economy in a most drastic way?” Prince Abdulaziz told reporters on Monday.
Opec and its non-member allies led by Russia are part of a global pact undertaking supply adjustments of around 1.2 million barrels per day since the beginning of the year. They will meet in Abu Dhabi on Wednesday and Thursday to review their production figures.
Opec's dismissal of trade war woes comes in contrast to the International Energy Agency, which has repeatedly revised down its oil demand growth forecast for this year. The IEA expects demand growth for crude to reach 1.1 million bpd in 2019 and 1.3 million bpd in 2020, a reduction of 100,000 bpd for this year and 50,000 bpd next year. The US-China trade war has depressed oil prices by $15 a barrel, Bloomberg reported, citing Energy Aspects.
Mr Barkindo noted that the revisions were premised on the impact of trade disputes on global economic growth this year and in 2020. Opec remained “cautiously optimistic” that the impact will not be magnified, he added.
The secretary general also did not expect any change in Saudi oil policy following the appointment of a new energy minister in the kingdom.