Energy minister says oil market vulnerable to political changes

24 November 2016 15:39 (UTC+04:00)

By Nigar Abbasova

The oil industry, with its history of booms and busts, is now under the reign of volatility, while political situation in the world is among the key factors standing behind the current tendency.

Energy Minister of Azerbaijan Natig Aliyev named politics as one of the reasons of the current volatile situation in the black gold market.

“We may not disregard any changes that occur in world politics, given the fact that oil is a political tool, and volatility of prices for the energy resource is mainly triggered by political realia,” he said in his article published on the official press.

He mentioned that the political processes in the world, as well as a balance of power between the world powers are rapidly changing.

 “The changes, in turn, affect the energy market and oil prices. While OPEC and non-OPEC states are seeking to bring a balance to the market, the political changes that occur in the transoceanic country, is also expected to have an influence on the market”.

Aliyev mentioned that significant changes in political and economic policy line of the White House are projected during the rule of the newly elected President, Donald Trump.  

“Taking into consideration statements of Donald Trump made during his election campaign, we may assume that the nearest perspectives in the policy of Washington include the provision of energy independence, cease of oil import from Saudi Arabia, removing restrictions on oil production in the country and rendering of state support to oil companies. But these are only assumptions”.   

While global energy market is still suffering from the persistent oil glut, which crashed prices over the past two years, such events would mean continued increase in supply, further suppression and increased instability in the oil prices.

As for the influence of such events on Azerbaijan, Aliyev said that the country has already switched to a new model of economy.

“The country is now implementing intensive measures to minimize its oil dependence.”

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Nigar Abbasova is AzerNews’ staff journalist, follow her on Twitter: @nigyar_abbasova

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