OPEC+ Losing Influence Over Oil Market Amid Disruptions
The Organization of the Petroleum Exporting Countries and its allies (OPEC+) is no longer able to effectively control global oil prices due to disruptions in supply chains. Despite setting monthly production quotas, these agreements have become ineffective as physical delivery of crude has been hindered by geopolitical events such as the closure of the Strait of Hormuz since February 28. This bottleneck has drastically reduced traffic through one of the world's most critical shipping routes for oil and liquefied natural gas. OPEC+ members, including Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria, and Oman, recently decided to maintain October production levels unchanged after six months of increases. However, this decision has had little impact on markets due to the inability to deliver promised barrels. The group's influence is further weakened by a shift in global oil dynamics, including rising U.S. shale output from regions like the Permian Basin and fluctuating demand. Market prices reflect these challenges: Brent crude closed at $96.28 per barrel on September 4, while diesel reached an all-time high of $5.897 per gallon in the United States.
Topics: fuel prices geopolitical risk oil market OPEC+