The economist spoke about the impact of inflation on the price of oil in the coming years

Inflation has a contradictory effect on the oil market. Evgeny Shatov, a partner at Capital Lab, told Izvestia on September 10.

On the one hand, inflation leads to an increase in production costs: oil extraction, refining and transportation become more expensive. In response to rising costs, manufacturers are trying to offset them by raising selling prices, which can negatively affect demand levels.

"On the other hand, high inflation coupled with high interest rates reduces economic activity and fuel consumption, especially in developing countries. Demand for oil and petroleum products is declining, which is putting restraining pressure on prices. Thus, in general, the impact of inflation may be limited," the expert said.

Shatov also stressed the importance of currency fluctuations in the oil market. He explained that the price of raw materials in most countries is set in US dollars, and the strengthening of the dollar makes it more expensive for other countries in their national currency, which negatively affects demand. This is especially true for countries such as India and Turkey.

A little slower: OPEC+ reduced the pace of production increase

After production increased by 547,000 barrels in September, oil companies will increase it by only 137 thousand barrels in October.

In addition, he added that for oil producers from OPEC+ countries, the strengthening of the dollar may reduce the purchasing power in local currency, which will lead to a reduction in production in order to maintain or raise prices.

Regarding the impact of significant fluctuations in the cost of raw materials on the U.S. economy and the global market, Shatov said that it has a positive impact on the income of the energy sector.

"With stable prices at the level of $66-75 per barrel, American oil companies (especially shale) operate with comfortable profitability. This contributes to job creation and tax revenue growth," he stressed.

However, the expert warned that the negative consequences could be more significant. He pointed out that rising fuel prices reduce the disposable incomes of the population, which can lead to a new surge in inflation.

Completed the barrel: oil prices withstood the OPEC+ meeting

Why oil is not getting cheaper despite the increase in production by the group's countries

On September 10, the US Department of Energy raised its forecast for the average cost of Brent crude oil in 2025 by 0.86% to $67.8 per barrel from $67.22 per barrel. At the same time, the agency predicts that Brent quotes will fall from $68 per barrel in August to $59 per barrel in the fourth quarter of this year due to growing global reserves as OPEC+ oil production increases, according to a report from the ministry's Energy Information Administration (EIA).

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