08/11/2025
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08/11/2025
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Oil production is running at full capacity. In other words, every oil-producing nation is focused on maximizing output for production and export, regardless of its impact on prices. Any increase in crude oil production inevitably puts downward pressure on prices. Currently, Brent crude is priced at $63 per barrel.
OPEC+ and other producers are flaunting their capacity like an open exhibition. Oil prices do not seem to be a priority, and OPEC+ appears unconcerned, or is perhaps fed up with taking the lead in stabilizing the market, knowing it will be the last to benefit from any price recovery. As always, OPEC has to step in to take the leading role to balance oil prices. However, the group seems indifferent about the low oil prices and how much further they will fall. Brent crude currently stands at $63 a barrel, yet no organization is calling for emergency meetings. Instead, all are pushing more volumes into the market, testing their production capacity.
Astonishingly, long-established oil organizations are seemingly unconcerned about the weakening of prices or about which producers OPEC may need to curb to restore market balance. If OPEC+ aims to pressure U.S. producers to slow down and reduce output, it doesn’t appear to be working. The U.S. continues to push for higher production, maintaining its position as the world’s top oil producer at 13.5 million barrels per day, with ambitions to increase volumes further. U.S. producers are also opting for cost-cutting measures, such as reducing manpower, to maximize output and efficiency.
Meanwhile, U.S. shale producers are frustrated with current oil prices, blaming their administration for the price weakness, which threatens their operations and profit margins. Losses are mounting, and with OPEC unable or unwilling to intervene, shale producers must rely solely on their elected officials.
The U.S., by using oil as a strategic tool in its fight with Russia, should understand that boycotts are rarely foolproof. Russia, for instance, is countering such efforts by offering discounts of more than $10 per barrel or utilizing its fleet as a bargaining tool. Losing top buyers like China, India, and Turkey is not an option for Russia, so it provides various incentives to secure their purchases. No other oil producers can fully replace the Russian supply, making the implementation of a boycott extremely difficult. Both Iran and Russia can always find alternative buyers at attractive prices.
History shows that boycotts rarely succeed, as there are always ways to bypass them, with Iran and Russia serving as clear examples. The result is an abundance of oil in the market, driving prices down and negatively affecting all producers alike.
