On the brink of oil production capacity, that is, the specter of long-term high prices

The price of a barrel of WTI crude oil rose today to USD 111 per barrel, and the commodity increased for the third session in a row. Reports that the United Arab Emirates and Saudi Arabia are approaching full production capacity may have contributed to this.

The Minister of Energy of the United Arab Emirates, Suhail al-Mazrouei, admitted on Monday that his country already produces almost the maximum amount of gas under the agreement with OPEC +, i.e. 3,168 million barrels per day.

Libya and Ecuador in a political collapse

French President Emmanuel Macron confirmed this information in an interview with US President Joe Biden, stating that the United Arab Emirates and Saudi Arabia, previously seen as two countries OPEC with spare capacity, they are no longer able to significantly increase production.

Moreover, political unrest in Libya and Ecuador threatens to further curtail supplies. Libyan National Oil Corp He said on Monday that he may be forced to declare force majere (force majeure is invoked when the parties to the contract cannot perform due to circumstances beyond their control) in the Great Sirte Bay area if the oil terminals there do not resume operations . Production problems also affect Ecuador, where the local energy ministry said that the country may completely suspend oil production due to anti-government protests.

A vicious cycle in the oil market

The situation is therefore becoming more and more difficult as the possibilities of influencing the price by increasing supply and compensating for the embargo imposed on Russia are fading away.

Oil prices therefore, they can potentially remain at high levels for a long time, and any increase in demand for a raw material may lead to increases and a subsequent fall in demand, due to higher prices.

Dollar and oil included - usually it was different

High oil prices overlap with the record quotations of the US dollar, which seems peculiar as the usually strong dollar could mean cheaper raw materials settled in it.

Currently, the dollar index has stabilized around 104 points, the highest in 20 years. The US currency may be supported by concerns about a slowdown in global economic growth. USD is considered the so-called a safe haven on the investor market and attracts capital in times of tension, crises and uncertainty.