The global oil market outlook remains highly uncertain given the emergence of the omicron coronavirus variant, Fitch Ratings said in a statement Monday. 

The variant may result in renewed lockdowns and travel restrictions, and this may increase price volatility in the near term, the global rating agency said in a statement.

“We anticipate demand will continue to improve in 2022, assuming new lockdowns will be shorter and less severe than those in 2020,” it said.

“The recovery might reverse if omicron or other potential new variants prove significantly more infectious or dangerous, leading to new prolonged synchronized lockdowns,” it added.

The agency said the Organization of Petroleum Exporting Countries (OPEC) and its allies, dubbed OPEC+, has been the main stabilizing factor in the global oil market since the start of the pandemic and is likely to remain so in the near term.

However, the policies of OPEC+ may become less effective over time as some members of the alliance, such as the United Arab Emirates and Russia, boost production to monetize their large reserves, it added.

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