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Rashid Husain SyedOil markets are being pushed and pulled – from both ends. As conflicting factors weigh on the markets, the future crude scenario remains hazy and muddy.

The Organization of Petroleum Exporting Countries and their allies, including Russia in the extended OPEC+, appear determined not to let the crude market prices go considerably below their target level. And they continue to leverage that through a supply control mechanism.

On the other hand, major consuming nations have their own priorities and objectives. They want to control the market behaviour – as much as possible. They do not want the crude market prices to go beyond a certain level.

Yet despite divergent interests, interestingly, there seems to be a convergence of objectives, priorities, and targets of these two otherwise conflicting groups. There are indications that both producers and consumers are targeting a price of around $90 a barrel.

Several factors are in play. Eyes remain focused on the possible future consumption pattern of the world’s largest crude importer, China, for the rest of the year and beyond.

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Reuters reported last week that Chinese oil demand could decrease for the first time in two decades this year. Terming it a “watershed moment,” Sun Jianan of Energy Aspects told the press that China’s gasoline, diesel and jet fuel demand could fall by 380,000 barrels per day (bpd) to 8.09 million bpd in 2022. This would be the first contraction since 2002, the reports underlined.

So far this year, China has seen its January-August crude oil imports decline by 4.7 percent, the first contraction for the eight-month period since at least 2004. In comparison, demand rose 450,000 bpd, or 5.6 percent, in 2021.

Meanwhile, global maritime trade growth is also slowing, underlining that a global economic slowdown is underway and a recession in major markets could soon materialize, threatening oil demand,

The latest Goods Trade Barometer from the World Trade Organization (WTO) showed that global trade growth stagnated at the end of August. The indicator “was steady but below the recent trend line for merchandise trade, suggesting that global goods trade continued to grow in the second quarter of 2022 but that the pace of growth was slower than in Q1 and is likely to remain weak in the second half of the year,” according to’s Tsvetana Paraskova.

Russia’s threat to halt oil and gas exports to Europe if price caps are imposed and a small cut to OPEC+ oil output plans are supporting crude market prices. Last week, OPEC+ oil producers announced cutting their output by 100,000 bpd for October. They also agreed that OPEC leader Saudi Arabia could call an extraordinary meeting anytime if market volatility persists.

The current market volatility has been there even though, in recent months, OPEC+ has been unable to meet its targeted output targets. Supplies have been less than promised and projected. Yet market prices have been falling, indicating a lack of demand. Excluding the quota-exempt members Iran, Libya, and Venezuela, 19 countries with quotas under the OPEC+ agreement fell 3.61 million bpd short of their targets – the widest gap in the alliance’s nearly five-year history.

Leaving Russia, which pumped 9.77 million bpd in August, aside, the other members were able to increase output by just 440,000 bpd since February, while at the same time, their output quotas rose by 2.96 million bpd, a recent Platts survey indicated.

Some felt the current price fluctuations and market volatility was indicative of sluggish market demand. OPEC+ producers, hence, do not want to leave it to market forces. They want a floor under the crude market price. And they are acting to achieve that.

According to, OPEC+ seems to be defending a particular price point – likely near $90 Brent. And, for OPEC+, production cuts would be a logical solution to falling prices as recession fears persist and concerns linger regarding China’s crude demand.

Interestingly, the target price of major global consumers does not appear to be far from the OPEC+ target. There are hints now that the U.S. and its NATO allies are targeting a price range of US$60 for the Russian Ural once the price capping business comes into play later this year.

One could thus deduce that the crude from other producers should then be available at around $20 plus premium. That means a price range of $80 to 90 per barrel. Alan Kuchnan, Chief Market Strategist of Bulls Eye Option, told Yahoo Finance: “I am looking to see crude stabilize here around the $100 level. That is essentially what I think Fed is looking for.”

A ‘convergence of targets’ between the consumers and the producers, somewhere around $90 a barrel, is on the cards. That is fast emerging as the rallying point of the world of energy in the current scenario.

Toronto-based Rashid Husain Syed is a respected energy and political analyst. The Middle East is his area of focus. As well as writing for major local and global newspapers, Rashid is also a regular speaker at major international conferences. He has provided his perspective on global energy issues to the Department of Energy in Washington and the International Energy Agency in Paris.

For interview requests, click here.

The opinions expressed by our columnists and contributors are theirs alone and do not inherently or expressly reflect the views of our publication.

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