The members of the Organization of Petroleum Exporting countries (OPEC), led by Ryad, and their allies led by Moscow, in 2016 formed an agreement called OPEC+ to better weigh on the market.
These 22 countries, mostly very dependent on the oil windfall, played, until recently, on the scarcity of the offer to boost prices, keeping in reserve millions of barrels.
With a more marked effort on the part of eight members: in addition to Saudi Arabia and Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria and Oman have consented, in recent years, to additional voluntary reductions.
After repeating several occasions the reintroduction of these volumes, they started the process in early April and now press the accelerator.
Such an increase in production, despite already very low prices on the market – around 60 dollars per barrel – may aim to “punish cheaters” among OPEC+members, those “who do not respect their quotas”, estimates Arne Lohmann Rasmussen, of Global Risk Management.
Internally, some countries are “no longer willing to tolerate the lack of discipline” shown by certain members, confirms Carsten Fritsch of Commerbank.
Kazakhstan, in particular, has increased its production in recent months and “has not respected” the rules of the cartel forcing it to compensate for its excesses.
This new announcement aims to “allow participating countries to accelerate their compensation”, notes OPEC+.
Cours at the lowest since 2021
However, these internal dissensions do not alone explain the decision of OPEC +, which can also be motivated by the desire to anticipate the potential geopolitical developments.
Because if discussions on Iranian nuclear and the search for a lasting ceasefire between Russia and Ukraine are leading, the United States could soften its sanctions against Moscow and Tehran, allowing the export of new barrels.
In this context, OPEC + prefers to advance its pawns by increasing its production quickly.
This strategy could however accentuate the withdrawal of black gold courses, enough to endanger American players in the sector.
The production would no longer be profitable for them “below 55 dollars over an extended period,” explains Ole Hvalbye, analyst at SEB.
Saudi Arabia could therefore be “testing” the influence it has on the courses, to send the signal to the market that it “can produce whatever price”.
Donald Trump’s coming to power in the White House in January marked a turning point for lessons.
The barrel, which was exchanging around the $ 80 a barrel, has been plummeting since the darkening of economic prospects.
The trade war between the United States and China, the two main petroleum consumers has, in particular, contributed to reducing demand forecasts, causing a drop in prices at more known levels since February 2021.
