Oil: Tensions within OPEC+ accelerate the fall in prices

As eyes turn to global markets, oil continues to plummet, confirming a 5% decline over the past month. This decline in prices, fueled by complex factors, exposes the fragilities of a sector under pressure.

OPEC+ facing its contradictions

The Organization of the Petroleum Exporting Countries, associated with its allies (OPEC+), seems stuck in a delicate situation.

Despite production reductions extended over 18 months, the expected effect is slow to materialize. In reality, these adjustments look more like an attempt to plug holes than a sustainable recovery strategy.

According to John Evans, analyst at PVM, the production overcapacity of OPEC+ members constitutes a major problem.

Some countries, such as the United Arab Emirates, are struggling to meet their quotas, thereby increasing market distrust. This collective breach undermines the credibility of the cartel, while the pressure from investors does not weaken.

Brent from the North Sea and American WTI, barometers of the oil markets, reflect this uncertainty.

The former falls to $71.43 per barrel, while the latter reaches a modest $67.66. At these levels, not only are producer margins eroded, but the implicit objective of maintaining a barrel between 80 and 90 dollars moves dangerously further away.

An overabundant global supply

At the same time, another challenge is emerging: non-OPEC+ oil production is reaching new heights. In the United States, drills are running at full capacity, pushing domestic production to a record level.

Data from the International Energy Agency (IEA) confirms this trend, anticipating an oversupply of 1.1 million barrels per day in 2025.

This dynamic can be explained by a combination of factors. On the one hand, political support for fossil fuels in the United States remains strong.

On the other hand, technological advances allow producers to maximize extraction at lower cost. This robustness outside OPEC+ further highlights the organization's inability to exert lasting influence on the global market.

The increase in American crude stocks (+5 million barrels this week) illustrates this paradox: despite a reduction in demand, supply continues to grow. This structural imbalance could maintain pressure on prices in the months to come.

These persistent fluctuations in oil prices raise a crucial question: are we witnessing a slow questioning of the world's dependence on black gold? If prices that are too low undermine the finances of producing countries, they also accelerate the transition to cleaner energies.