OPEC member states’ compliance with production quota’s has fallen to a dismal 54%, something Secretary-General Abdalla El-Badri isn’t too happy with. At the same time, its traditional power structure with Saudi Arabia as undisputed production king is under attack by the rise of Iraqi oil production potential.
Now, to make matters even more uncertain for the cartel, the non-OPEC world is increasing its production relatively quickly as well.
According to OPEC’s latest March report, even though their production levels remain well below mid-2008 levels, total world supply is already back up there. (shown below)
Thus non-members are becoming more significant, Iraq wants to let loose production, and even many OPEC members aren’t even listening to the quotas from central command.
So while Abdalla El-Badri has said that $70 – 80 oil is the lowest price he thinks makes sense for further investment, hoping to set a floor, there might not be much he can actually do to defend it these days.
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