Plunge in oil prices: will OPEC intervene again?

04/07/2026

Oil prices are currently hovering between $69 and $72 per barrel, down from the recent high of around $120 per barrel during the closure of the Strait of Hormuz. With prices now stabilizing near the $70 level, there are few signs of further increase. Instead, the market could experience further decline unless OPEC intervenes once again, as it usually does. How far will oil prices fall before OPEC decides to act? Reducing production primarily benefits competing oil producers, while offering limited gains for OPEC itself.

How long can OPEC continue intervening in the oil market each year while steadily losing market share? What alternative strategies can it adopt to maintain stable global oil prices without losing revenues and market share? Meanwhile, non-OPEC producers continue to benefit from OPEC’s protection without sacrificing much and enjoying all the benefits by increasing production and expanding exploration. OPEC is meeting on Sunday in search of another quick solution to address the decline in oil prices and the resulting pressure on monthly and annual revenues.

Once again, the organization is expected to discuss the usual issue of falling oil prices, with further production cuts likely to be on the agenda. But how long will OPEC continue asking its members to make additional sacrifices? At nearly every meeting, the same solution is proposed - reduce production to support prices, but within one week, the same problem often reappears. Some members fail to fully comply with their production quotas, and oil prices begin to weaken once again. The same OPEC tradition and pattern of full adherence gradually weakens over time.

Some members leak additional oil into the market, taking advantage of higher prices and enjoying the financial benefits. With continued non-compliance, more oil enters the market, causing prices to weaken again. This leads back to the same cycle - OPEC meets, decides on further production cuts, and attempts to stabilize the market. Yet within a short period, the same pattern of weak adherence reappears. Now that global markets have stabilized and the Strait of Hormuz has reopened for normal business, oil prices are expected to decline further.

As a result, OPEC will likely return to addressing the weakening in oil prices through its traditional routine of meetings, consultations, and decisions. This typically involves discussions on additional production cuts and renewed calls for members to adhere more strictly to their assigned quotas and output restrictions. The calm global situation and the free passage through the Strait of Hormuz mean increased oil supply to the market and lower crude oil prices. This may justify OPEC intervention and a single primary response - reducing and curtailing oil production. This would involve standard notifications to OPEC members to restrict output to bring prices to an acceptable level, perhaps in the range of $70 to $75 per barrel. This is likely the most suitable level OPEC can aim for at the present time. As the market remains well supplied with oil, let us hope that there will be no further decline in prices.

By Kamel Al-Harami
Independent Oil Analyst
email: [email protected]