Prominent OPEC countries may be reluctant to risk lower oil prices, as doing so could jeopardize the budgets for their ambitious national spending programs
Early June saw OPEC extend its 3.66 million barrels per day bpd of production cuts to the end of 2025. It also announced that it would extend another 2.2 million bpd to the end of September 2024. Together, these cuts comprise around 5-6% of global oil demand. Despite this, though, the Brent oil price global benchmark has failed to break through the key US$90 per barrel pb level that was last achieved in September.
However, it remains the case that there is no genuine evidence of Saudi Arabia having the capacity to increase its crude oil production much above 10 million bpd for any sustained period without damaging the long-term integrity of its wells, as also analysed in full in my latest book on the new global oil market order. The fact is that Saudi Arabia produced an average of 8.267 million bpd of crude oil from 1973 to 1 May 2024, according to figures from OPEC itself.
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