OPEC Plus succumbs to the market’s sluggishness
Although it is not exactly clear to what extent the eight countries of OPEC Plus that agreed to reduce production in the second and third quarters of this year have adhered to the promised cuts, official statistics published indicated this reduction in production. However, this downward trend also failed to impact the oil market. The ongoing crises in the Middle East and the serious threat of conflict between Iran and Israel also had no significant effect, and after a few days to a week’s rise in oil prices, they fell again. The decrease in China’s oil demand is one of the most important issues affecting the oil market, and perhaps the high oil production in the Western Hemisphere has even greater importance. The production of non-OPEC countries has increased to such an extent that it could lead to a serious surplus in the market next year. Apart from the powerful production in the U.S., Canadian and Guyanese oil has flooded the Western Hemisphere market, and successive extraction permits in Brazil are also on the way. In these circumstances, OPEC Plus realized that the early October date it had considered for increasing production again would further depress the market. As a result, the eight countries of OPEC Plus agreed to maintain the reduced level of oil production for another two months, with the intention of increasing production in December if conditions were favorable. It should be noted that a country like the UAE plans to significantly increase oil production in the coming years, and Kuwait, with newly discovered resources, aims to become a serious player in the oil market.