'All Eyes Are on China' After OPEC+ Hike: Crystol Energy

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00:00Carol, in some ways, this was a much more muted response from OPEC. Are we reaching the limits

00:06now of what it can do? Are we getting to a period of stability?

00:11I mean, it depends really on how you read it, because yes, you can say it's a modest increase

00:16because some people were expecting a much higher unwinding of barrels of the voluntary cuts of the

00:231.65 million barrels a day voluntary cuts, which were the second tranche of voluntary cuts introduced

00:29by eight members, especially after we saw how over the summer they unwided their first tranche of 2.2

00:35million barrels a day quite rapidly. So therefore, today to see 137 barrels a day, maybe some people

00:41must have seen this as modest or not on par with what happened over the summer. But it is nevertheless

00:48a continuity in terms of the direction of the travel, because last month for October, they already

00:53announced a similar amount. So they are continuing with this cautious approach. And also it's still

00:58an increase. It's still putting more barrels in the market, bearing in mind that the seasonality

01:03of the demand, both in the Western Hemisphere with the holiday season over, the driving season

01:08over, but also domestically in the region, especially in the Middle East, where we use lots of oil

01:13to cool our houses in the summer, that the seasonality of the demand is also tapering off. So that has

01:20encouraged a more cautious approach. Now, some people would say, oh, OPEC is still testing the

01:25market because prices have not crashed. That is true. But we have to keep in mind that what

01:30this OPEC is announcing on paper is not actually what is being released in the market with some

01:36companies that only around 60 percent of the 2.2 million barrels a day made it to the market,

01:41because some producers have to compensate and others, like Russia, don't have the capacity to

01:46put more barrels in the market. Carol, I understand that from a supply side point of view, that actually

01:51in reality, we don't see these barrels arriving. I'm also aware of what is happening on the demand

01:56side as well. The Chinese in particular are buying a lot of crude and putting it into storage. Is

02:01that one of the key reasons why we haven't seen oil prices coming sharply lower? And then that begs

02:06the question, will the Chinese continue to buy? Absolutely. I mean, if I look at the demand side,

02:12I think China is the main component in terms of keeping a floor to oil prices. So what we have seen

02:19so far, I think if you take China out of the equation, prices would have been much lower. But the

02:25Chinese are buying not because their economy is booming. It's primarily for stockpiling,

02:29including strategic petroleum reserves, and especially when they have access to discounted,

02:35attractive, cheap, cheaper oil to buy from Russia and other places as well. So of course,

02:40they are buying. And the big question as we go into 2026, and this is where you can see the kind

02:46of consensus among analysts observing the market, observing the Chinese economy, observing domestic

02:52consumption and their imports need. The big question is for how long and for how much more

02:57will the Chinese continue to buy and salvage oil demand, especially in the absence of a global growth

03:05in the economy that would fuel a global growth in oil demand. So all eyes are on China in terms of

03:11the strategy. And nobody really knows. All the numbers that we have are primarily guesswork because

03:16the figures when it comes to inventories in China are not publicly available. There are lots of

03:22opacity around the Chinese figures. So we're all a bit engaging in some guesswork about what's

03:27happening in that part of the world.