The year has begun With many ups and downs For the crude oil market. To this are added global commercial tensions, the arrival of Trump and uncertainty about demand in China. This complex panorama has promoted OPEC+ to make a serious decision.
Short. OPEC+ has decided to start the withdrawal of the production cuts that this gradual strategy has maintained since 2022 It will begin to be implemented In April to increase oil production. This situation, which will last until September 2026, will cause a change in the balance between supply and demand, with potential effects on crude oil prices.
In depth. The reason behind this decision by the organization is double. On the one hand, the OPEC+ member countries are looking to recover the market share they have lost during the years of cuts, in which the agency remained below 30% world participation. On the other hand, the opening of production would stabilize crude oil prices.
The gradual increase. The agreement established by the Organization of Petroleum Exporting Countries has set the production of crude oil in 138,000 barrels per day of volunteer countries. This increase will focus mainly on voluntary cuts, which constitute an important part of restricted production. In addition, the United Arab Emirates, one of the group members, They will begin to increase their production After requesting a greater share of the agreement.
The problems. Managing excess oil when demand is less is one of the main challenges of OPEC+. If the offer Keep growing At this rate, prices cannot be sustained for longer and will fall. This situation, which occurs in a context of a probable global crisis, increases the pressure on the crude oil body to adjust its strategy and do not aggravate the oversupply.
On the other hand, the OPEC+ will stop supervising Petroleum production with the International Energy Agency. This decision has caused uncertainty in the markets, since the IAI is considered one of the main sources of reference globally.
Trump’s arrival. US President’s policies They have focused on encouraging Internal production, such as energy deregulation and impulse to fracking. These new measures will cause their oil and gas projects to be more attractive, increasing the global crude supply and exerting more pressure on prices. All this will lead to a challenge for the strategic decisions of OPEC+.
In addition, Trump He has demanded To the oil organism that lowers crude oil prices, arguing that this could help end war in Ukraine.
China’s deceleration. The largest oil importer is suffering An economic slowdown. This situation has many edges and has a very deep impact on the global demand for crude. On the one hand, there is an indirect effect on other emerging economies that depend on China as its main commercial partner. On the other hand, OPEC+ could be forced to reconsider its decisions of gradual increase in production. If not adjusting to new market conditions, prices could fall further and the organization could face a more complex situation, with less margin to maneuver.
Forecasts Rather, uncertainty. On the one hand, if the OPEC+ continues with its strategy of gradual increases in production, we will observe if the global demand will be able to absorb this offer without the prices falling abruptly. On the other hand, the pressures of external actors such as the United States will have to take them into account because they will also continue in the line of continuing to extract. In short, the OPEC+ policy could avoid an abrupt fall of prices if demand remains stable. However, everything can happen.
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