OPEC+ Can Trade Short-Term Oil Pain for Long-Term Gain
The cartel should pump more crude in the second quarter.
Pumping more oil could help OPEC+ in more than one way.
Photographer: Arif Ali/AFP/Getty Images
Over the next few days, OPEC+ countries need to decide whether to extend their “voluntary” oil output cuts into the second quarter. The market anticipates a full rollover. Instead, I believe the cartel has a chance to add a bit of extra supply, taking some short-term pain for a long-term gain.
In November, several OPEC+ nations, led by Saudi Arabia and Russia, announced a series of production curbs totaling 2.2 million barrels a day for the first quarter of 20241. The official explanation was that the reduction was to support “the stability and balance of oil markets.” Even if left unsaid, the actual objective was clear: establish a firm floor for crude prices at around $80 a barrel.