LONDON: Greta Thunberg’s excoriating dismissal of world leaders over their promises to address global warming as “blah, blah, blah” wasn’t as it turned out, too wide of the mark in 2021.
Despite earnest commitments, from Washington to Beijing, to reduce fossil fuel consumption and cut planet-heating emissions, demand for crude oil soared in 2021 as the global recovery from the COVID-19 pandemic took off.
Don’t tell Greta, but oil prices are up around 50 percent this year, courtesy of increased demand and tight supply.
In January, the month when Joe Biden was officially sworn in as president of the US and Washington rejoined the Paris Agreement on climate emissions, a barrel of Brent crude was trading at about $52.
By March it had spiked to $70.
Momentum in oil prices had been building since the last quarter of the previous year, but the immediate catalyst for March’s spike, and indeed this year’s increase in global crude prices, started with OPEC and its allies, who surprised the markets by agreeing to extend its production cuts into April.
Amid a nascent economic recovery, low inventories, and a lack of spare capacity, oil supply suddenly looked a lot tighter.
The sharp increase in oil demand as COVID-19 restrictions began to ease in the middle of the year took suppliers by surprise and led to tensions between the US and OPEC+.