Oil’s $80 rally is short-term spike: Opec

london/dubai — Opec sees oil’s rally towards $80 a barrel as a short-term spike driven by geopolitics rather than any supply shortage, 4 Opec delegates said, a sign the group is not rushing yet to rethink its supply-cutting agreement.

The view of top exporter Saudi Arabia is that any brief, speculator-driven jump in oil prices is not sufficient grounds for producers to boost output, an Opec source familiar with the kingdom’s thinking said.

For such a decision to occur, the rally would need to be driven by data pointing to a supply impact, the source said.

The four Opec delegates said the latest rise in prices stemmed more from concern about US sanctions on Iran and tension in the Middle East, rather than a suddenly tighter balance between oil supply and demand.

“Prices are high just because of the tensions,” one of the Opec delegates, who declined to be identified, said.

Since last year, oil has been supported by a deal by the Organisation of the Petroleum Exporting Countries, plus Russia and other non-members, to cut output. Prices have risen about 40 per cent since the accord began in January 2017. Global benchmark Brent crude on Tuesday hit $79.47, the highest since November 2014, before easing below $78 on Wednesday. Prices could rally further before declining, according to some in Opec.