Opec and oil market dynamics
Opec's goal of defending high oil prices may suit some members in the short run, but its long-term impacts could be damaging
Since its historic agreement in November 2016, Opec's efforts to manage the oil market have shown signs of success: key benchmarks are in backwardation, speculative positioning has been at record length and a floor price of $60 a barrel has been defended. Strong Opec compliance—both voluntarily (Saudi Arabia) and involuntarily (Venezuela)—has been supported by stronger-than-expected demand growth. By Opec's own measure of success, its target of reducing five-year commercial OECD inventories has been largely met (currently between 30-50m barrels above five-year average). As Opec meets in June to review its progress, it has already signalled its dissatisfaction with using the five-year average
Also in this section
25 July 2025
KRG, Iraq’s central government and Turkey are all working to get exports flowing from the key port, but complications remain
25 July 2025
Mozambique’s insurgency continues, but the security situation near the LNG site has significantly improved, with TotalEnergies aiming to lift its force majeure within months
25 July 2025
There is a bifurcation in the global oil market as China’s stockpiling contrasts with reduced inventories elsewhere
24 July 2025
The reaction to proposed sanctions on Russian oil buyers has been muted, suggesting trader fatigue with Trump’s frequent bold and erratic threats
