Why doesn't OPEC+ expand its output increase to 800,000 barrels per day? The oil-producing countries are very scheming

After discussing crude oil production in November at the meeting last week, the Organization of the Petroleum Exporting Countries and its allies (OPEC+) issued an important statement announcing that the members of the organization will not increase crude oil output in November, but will increase oil production according to the original plan. 400,000 barrels per day.

Some analysts questioned why OPEC+ did not increase the original output by 800,000 barrels per day? Analysts said that concerns about possible weakening of oil demand in the future are one of the reasons OPEC+ maintains its current production policy, and OPEC+ members are not keen to disrupt the current oil price increase.


Concern about the possible weakening of future oil demand is one of the reasons OPEC+ decided to stick to its original agreement, which is to increase the total market supply of 400,000 barrels per day, rather than respond to calls for increased production.

In recent times, the US crude oil industry has been frequently hit. In addition to the sharp cut in the Gulf of Mexico crude oil production in a short period of time, there have been serious crude oil leakage accidents in offshore drilling recently. Under this circumstance, US President Biden has always hoped that OPEC+ countries can increase the supply of crude oil.

Another reason why OPEC insists on 400,000 barrels per month is that all oil-producing countries have received higher incomes because of rising oil prices. One of the sources, OPEC+ representative said, "Everyone is very happy." However, the source also said that before the OPEC+ meeting last week, it was considering adding a larger supply of 800,000 barrels per day, and added that the supply was eventually abandoned and replaced by the original arrangement.

A source said that based on past experience, OPEC is more cautious, because any hasty decision may lead to a sharp drop in oil prices, so political pressure from the United States and other countries has not yet effectively changed this strategy.

In the current environment, caution is undoubtedly desirable. The scene of the price collapse last year is still vivid, because American shale drillers still remember the price collapse last year, so the latter continued to abide by the production discipline, and OPEC+ made the production decision.

But what makes OPEC+ happy is that many people in the world are just the opposite. For example, India, a country that relies on imported oil for 80% of its consumption, has released oil from its strategic reserves to cushion the price impact on its economy. The United States is considering similar measures to reduce oil prices.

The Oil Minister of Baghdad stated at an industrial event this week that for Iraqis, who have a population of 40 million and rely on oil for 85% of their income, we hope that the price of oil can reach US$120! He also added that oil prices of US$75 to US$80 per barrel are fair to producers and consumers.