The market’s stagnation has forced OPEC Plus to yield
Although it’s not exactly clear how committed the eight OPEC Plus member countries, which agreed to reduce production in the second and third quarters of this year, were to the promised cuts, official statistics indicated that the production was indeed reduced. This downward trend still failed to impact the oil market. Successive crises in the Middle East and the looming threat of conflict between Iran and Israel also had no serious effect, and after a few days, or at most a week, of rising prices, oil prices began to fall again. One of the most significant factors affecting the oil market is the reduced demand for oil from China, and perhaps the high oil production in the Western Hemisphere has also played a more crucial role. The oil production from non-OPEC countries has increased so much that it could lead to a serious surplus in the market next year. Apart from the strong production in the United States, Canadian and Guyanese oil has flooded the Western Hemisphere market, and continuous extraction permits in Brazil are also underway. In this situation, OPEC Plus realized that the early October date set for increasing production again would lead to even more market decline. Therefore, the eight OPEC Plus member countries agreed to maintain the reduced oil production levels for another two months, with plans to increase production in December if conditions were favorable. It should be noted that a country like the UAE has plans for a significant increase in oil production in the coming years, and Kuwait, with newly discovered resources, aims to be a serious player in the oil market.