Although they have been caught off guard by U.S. growth, OPEC members and its non-OPEC partners have successfully regrouped and will likely be well positioned if fundamentals eventually tighten even more.
Smaller producers are eager to work with OPEC or join the cartel in an effort to boost their reputation, amplify their market clout, and gather research, information, and resources to attract investment.
Major oil producing countries, and wealthy individuals in certain petrostates, have injected billions of dollars into soccer clubs, mostly in European leagues, and their reach is spreading in an attempt to promote their “soft power.”
With purchases of U.S. crude, European countries are able to reduce Russia’s leverage and force Moscow to negotiate and be more cooperative.
A clumsy exit strategy, producers cheating on quotas, or a rapid response from U.S. shale producers could undermine the effectiveness of the deal. Conversely, the potential for higher prices is also a stark possibility.
At an event hosted by Securing America’s Future Energy, experts warned that a combination of underinvestment in long-cycle conventional petroleum projects and rising geopolitical risk may significantly increase prices next decade.
An extension is virtually guaranteed but today’s overwhelming consensus masks real divisions, complications and misgivings.
The risks of more oil production losses have intensified as the financial screws on Caracas continue to tighten. Deteriorating conditions in Venezuela are occurring at the same time OPEC is looking to extend its production cut and tensions throughout the Middle East are rising.
Saudi Arabia is poised to make "unprecedented" cuts to customers next month, while OPEC's secretary-general suggests the cartel may take "extraordinary measures" to further tighten oil market fundamentals.
Saudi Arabia and Russia successfully collaborating on tightening fundamentals and lifting prices, if it continues, will likely have large ramifications for the global oil market in the future, given that both are in a position of strength with high production volumes and large proven reserves.