OPEC+ volumes remain a big factor. Some argue that the group is accelerating the return of voluntary barrels to punish quota violators. That may be partially true. But given OPEC’s history, if they really wanted to discipline, they’d deliver a bigger punch. So, clearly, other motives are at play. Perhaps they’re anticipating gaps in supply reemerging. Consider the war in Ukraine and the ongoing negotiations with Russia. President Trump appears to be running out of patience and has already threatened further sanctions if Putin doesn’t agree to a peace deal. Then, we have the upcoming driving season in the US, which traditionally puts upward pressure on prices, and a very gradual slowdown in US oil production. When you put such elements together, even if OPEC+ releases more barrels, that may simply offset declines elsewhere, explaining why prices remain rangebound at this $65 mark.
Are some OPEC+ members suffering more than others under current prices and could that influence policy going forward?
When it comes to African nations within OPEC+ for example, they have a voice, but I don’t think they have enough influence to change the group’s overall strategic direction, especially when decisions are made at the leadership level. Also, OPEC’s strategy isn’t purely commercial; there are political and geopolitical factors at play. OPEC’s collective strategy can’t be held hostage by countries that have poorly managed their economies or squandered oil revenues. That said, we should distinguish between different OPEC members. While most are oil-dependent, their exposure to price fluctuations varies. It’s not just about how painful low prices are, it’s also about how well these countries have prepared. Those with large sovereign wealth funds, especially stabilization funds set aside for times like these, will suffer less. These countries put a substantial portion of revenues aside not just for future generations, but to weather oil market volatility. In contrast, countries like Nigeria have historically failed to diversify their economies or invest oil revenues wisely.