Whether barrels will be reintroduced in April remains uncertain given demand and supply dynamics. Another
variable to consider is US policy. With President Trump back in office, we’ve seen controversial policy proposals emerge, such as incentivizing domestic production and expecting global prices to remain low. This is something that OPEC+ must navigate carefully. I don’t think Trump will necessarily position himself against the group. During his first term as president, he pushed for lower oil prices. I don’t think OPEC will take any action that directly contradicts the interests of Saudi-US relations, especially with Trump, a friend of Saudi Arabia, back in office. However, Trump’s influence on oil prices will likely come from other policies, such as tariffs on China, Europe, and Canada, which could ripple through the global economy. Prices in the $70 range may not be a problem for Trump, but anything above $80 could lead to pressure on OPEC+ to increase production. Incentives for more US oil production could add a maximum of 500, 000 b/d, but we might see more natural gas production and a relaxation of land-use restrictions.
What would be the effect on global markets if Saudi Arabia decided to open the taps?
Over the next two years, I don’t see that happening. Saudi Arabia has successfully cemented an agreement that runs until the end of 2026. This is a significant milestone. A breakdown of that, like what we saw in April 2020 when the agreement collapsed and Russia pumped without limits, seems unlikely now. Saudi Arabia acted then to protect its market share, but under the current framework of compensation and compliance, I believe they will prioritize the stability of the alliance over unilateral action. I anticipate cooperation continuing
through at least 2026 without a price war.