OPEC's collusive actions run counter to established international anti-competitive norms at American expense. But by amending the Sherman Act, NOPEC offers a tool to combat these activities.
While the result from Vienna is ostensibly a success, there are obvious cracks in OPEC’s cohesion, as well as in its strategy to tighten up the market.
U.S. Sets Record for Oil Production Growth in 2018; U.S. Expected to Drive Global Supply Growth Through 2024
Both BP and the IEA expect U.S. production to drive global supply growth in the coming years, but uncertainty about shale's production trajectory was marked out as a potential concern.
Russian discontent over Saudi intentions to reduce production is a likely potential flashpoint for the upcoming meeting—but internal OPEC politics, particularly between Saudi Arabia and Iran, mean this summit is rife with tension that threatens to upset proceedings.
The members of the OPEC+ coalition have different economic incentives. Most member countries are producing as much as they can and have little scope for higher output, so they are on board with an extension of production cuts.
Any decision to reduce oil inventories OPEC's upcoming meeting will be greatly helped by Venezuela’s declining oil production, which has just fallen to its lowest levels since January 2003.
While there is a long list of potential factors that could surprise the market in 2019, OPEC+ supply curbs create a tightening baseline that should lead to higher oil prices as the year wears on.
Responding to a looming period of oversupply, OPEC and its non-OPEC allies agreed to cut production through the first half of 2018 of 1.2 million barrels per day.
If it occurs, the production cut would be a dramatic about-face compared to six months ago, when Saudi Arabia and Russia signaled their intention to lift output to ensure the oil market did not overly tighten.
Perry Meets with Russian and Saudi Energy Ministers to Blunt Impact of Iran Sanctions on Oil Markets
Renewed Iran sanctions will coincide with election season, granting Russia and Saudi Arabia leverage in negotiations with the United States.