In 1973 one of the greatest energy crises of the twentieth century broke out. Yom Kipur war and the oil embargo decreed by Arab countries fired the price of crude oil, which quadrupled in a few months. The consequence was an economic storm: inflation, recession and a deep geopolitical rearrangement that catapulted the OPEC to the center of the world energy board.
Five decades have passed, but oil continues to mark the pulse of global tensions. There is no formal embargo, but worldwide conflicts added to a Commercial War promoted by the United States. Despite all this unstable situation, the OPEC+ has chosen to continue producing for the third consecutive month, in an already saturated market and with prices in descent.
Disturbing signals. Against all forecast, OPEC+ has decided to increase its production in full price drop. At its last meeting, the poster, with the impulse of Saudi Arabia, has approved to add 411,000 barrels per day from July. The measure has left several of its own members perplexed, According to Bloomberg. The adjustment is equivalent to just 1.2 % of the global demand, but its political and strategic impact is deeper.
Very disparate reasons. A possibility like He has pointed out The Economist is that Saudi Arabia and its Gulf allies would be trying to please Donald Trump. During his recent tour of the region, the former president pressed directly to achieve a decrease in fuel prices. In return, Riad and Abu Dabi expect strategic benefits, such as agreements in technological sectors such as In artificial intelligence chips.
However, this is not the only motivation. The United States Plan based on an aggressive fracking expansion To lower oil It has altered the global market balance. In this scenario, Saudi Arabia has opted for a blunt response: flood the market with crude. By increasing the supply and forcing a price drop, it seeks to press schist producers in the United States, whose profitability depends on higher prices. This strategy also allows you to punish OPEC+ members who do not respect the quotas and, at the same time, recover part of the lost market share in the face of American unconfral oil.
The background problem. The OPEC+ crisis is not only a matter of strategy or prices, but of internal cohesion. The cardinal regla of the poster on not producing more than agreed is being ignored by several members. According to The Economistthe United Arab Emirates (EAU) have declared to produce 2.9 million barrels per day (MB/D), but according to analysts consulted by the medium they have estimated that they would be producing between 200,000 and 500,000 b/d, well above their real share.
The most worrying thing for OPEC+ is that even the “secondary sources” that they use to verify figures seem complicit in maintaining this fiction. Many are consultants that depend on contracts with state companies such as ADNOC (EAU) or Saudi Aramco.
Although this comes from before. The first to reveal itself as such It was Kazakhstanwho overproduces up to 300,000 b/d above what was agreed in April. While Iraq has difficulty controlling its total production, which includes fields in Kurdish hands. These three countries are weakening the authority of the poster from within.
And there is a surprise more. The only member of the group with geopolitical power comparable to the Saudi, has begun to show opposition. Bloomberg has detailed That at the most recent meeting, Russia supported by Algeria and Oman, asked to freeze production in July to evaluate the effects of previous increases, but his proposal was ignored. Saudi Arabia has imposed its plan without consensus, a clear sign that the era of collegiate leadership is over.
Are we facing an implosion? If Saudi Arabia fails to control the Emirates or contain divergences with Russia, the poster runs the risk of becoming irrelevant. The promised fees review for this year has been postponed until 2027, which has unleashed frustration in Abu Dhabi. The Emirates, with a capacity that almost reaches 5 MB/D, need only $ 50 per barrel to balance their accounts, compared to the $ 90 that requires Saudi Arabia. The structural divergence between the two is deep. An analyst with contacts in both governments He has warned For The Economist that is only a matter of time for an open clash between the two giants, which could precipitate an Emirati output of the OPEC+.
On the edge of collapse. For 65 years, OPEC has survived wars, pandemics and the fracking boom. But it seems that it has reached its limit in this situation, where the demand for oil could reach its peak in the next decade, and many petroesties are determined to sell what they can before it is too late.
If internal cohesion continues to erode, if the quotas are unfulfilled unpaid and if the large producers act unilaterally, the OPEC+ will no longer be a global strategic actor and will become a symbolic alliance. The current “crack” is not just prices. It is an institutional “crack.” And this time, it can be definitive.
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