The Challenges Facing OPEC+ in the Oil Market

OPEC+ Saudi Arabia faces major economic challenges with falling oil prices and rising geopolitical tensions ahead of the Vienna meeting.

Share:

OPEP+ Équilibre Prix et Politique

The Organization of the Petroleum Exporting Countries and their allies (OPEC+), led by Saudi Arabia, are preparing for a crucial meeting in Vienna on November 26, against a backdrop of fluctuating oil prices and heightened geopolitical tensions. This meeting comes at a time when Iran is calling for an oil embargo against Israel, a demand that remains largely unheeded.

Saudi Arabia’s struggle to stabilize the oil market

Over the past year, Saudi Arabia has struggled to prop up the oil market by cutting production to 9 million barrels a day, its lowest level since April 2011, excluding the COVID pandemic and the September 2019 attack on the Abqaiq crude processing facility. Despite these efforts, the kingdom is suffering the economic consequences of a market that is insensitive to these reductions.

Impact of Falling Oil Prices on the Saudi Economy

The goal of stabilizing prices by 2024 is likely to meet resistance from other producers. Fears of a global economic slowdown, particularly in China, and robust non-OPEC supply are making market players cautious, despite relatively solid fundamentals. In addition, Dated Brent was valued at $83.33 a barrel on November 20, down from $98 on September 27, when voluntary cuts had boosted prices.

Outlook and decisions expected in Vienna

The Vienna meeting will address several crucial points. It will evaluate the main declaration of cooperation, which involves all members, and the current quotas, in force until the end of 2023, with revised levels for 2024. These revisions will affect most sub-Saharan producers, such as Nigeria and Angola, who regularly produce below their allocations. At the same time, the United Arab Emirates will see its quota increase from 2.88 to 3.219 million barrels per day in 2024, which may require further quota cuts from member countries to effectively support prices.

Key role of Russia and the United Arab Emirates

Russia, the Group’s largest non-OPEC producer, will also play a key role. Although Russia initiated voluntary cuts, it has already reduced part of its latest supply cut, with crude oil production up by 20,000 barrels a day in October.

Potential consequences of OPEC+ policies

Faced with this complexity of decisions and market uncertainty, OPEC+ could consider further tightening of supply. Clay Seigle, Director of Global Oil Services at Rapidan Energy Group, notes that OECD commercial inventories rose in September, reaching their highest level since July 2021.
This highlights the continuing challenges OPEC+ will face in its quota decisions in 2024, pointing to policy changes and emergency meetings in the foreseeable future.

The OPEC+ meeting in Vienna is shaping up to be a critical moment, when the balance between price support and responses to global economic and geopolitical pressures must be meticulously adjusted. The decisions taken will influence not only the immediate future of the oil market, but also global political and economic dynamics in the years to come.

The expansion of the global oil and gas fishing market is accelerating on the back of offshore projects, with annual growth estimated at 5.7% according to The Insight Partners.
The Competition Bureau has required Schlumberger to divest major assets to finalise the acquisition of ChampionX, thereby reducing the risks of market concentration in Canada’s oilfield services sector. —
Saturn Oil & Gas Inc. confirms the acquisition of 1,608,182 common shares for a total amount of USD3.46mn, as part of its public buyback offer in Canada, resulting in a reduction of its free float.
OPEC slightly adjusts its production forecasts for 2025-2026 while projecting stable global demand growth, leaving OPEC+ significant room to increase supply without destabilizing global oil markets.
Talks between European Union member states stall on the adoption of the eighteenth sanctions package targeting Russian oil, due to ongoing disagreements over the proposed price ceiling.
Three new oil fields in Iraqi Kurdistan have been targeted by explosive drones, bringing the number of affected sites in this strategic region to five in one week, according to local authorities.
An explosion at 07:00 at an HKN Energy facility forced ShaMaran Petroleum to shut the Sarsang field while an inquiry determines damage and the impact on regional exports.
The Canadian producer issues USD 237 mn in senior notes at 6.875 % to repay bank debt, repurchase USD 73 mn of 2027 notes and push most of its maturity schedule to 2030.
BP revised upwards its production forecast for the second quarter of 2025, citing stronger-than-expected results from its US shale unit. However, lower oil prices and refinery maintenance shutdowns weighed on overall results.
Belgrade is engaged in complex negotiations with Washington to obtain a fifth extension of sanctions relief for the Serbian oil company NIS, which is majority-owned by Russian groups.
European Union ambassadors are close to reaching an agreement on a new sanctions package aimed at reducing the Russian oil price cap, with measures impacting several energy and financial sectors.
Backbone Infrastructure Nigeria Limited is investing $15bn to develop a 500,000-barrel-per-day oil refinery in Ondo State, a major project aimed at boosting Nigeria’s refining capacity.
The Central Energy Fund’s takeover of the Sapref refinery introduces major financial risks for South Africa, with the facility still offline and no clear restart strategy released so far.
PetroTal Corp. records production growth in the second quarter of 2025, improves its cash position and continues replacing key equipment at its main oil sites in Peru.
An explosion caused by a homemade explosive device in northeastern Colombia has forced Cenit, a subsidiary of Ecopetrol, to temporarily suspend operations on the strategic Caño Limón-Coveñas pipeline, crucial to the country's oil supply.
U.S. legislation eases access to federal lands for oil production, but fluctuations in crude prices may limit concrete impacts on investment and medium-term production, according to industry experts.
Permex Petroleum Corporation has completed a US$2mn fundraising by issuing convertible debentures, aimed at strengthening its cash position, without using intermediaries, and targeting a single institutional investor.
Petróleos de Venezuela S.A. (PDVSA) recorded $17.52bn in export sales in 2024, benefiting from increased volumes due to U.S. licences granted to foreign partners, according to an internal document seen by Reuters.
The detection of zinc in Mars crude extracted off the coast of Louisiana forced the US government to draw on its strategic reserves to support Gulf Coast refineries.
Commissioning of a 1.2-million-ton hydrocracking unit at the TANECO site confirms the industrial expansion of the complex and its ability to diversify refined fuel production.