On Sunday, June 2, the Organization of the Petroleum Exporting Countries (OPEC) and several non-member oil-producing countries, including Russia, reached an agreement to extend the decline in oil production until the end of 2025. This decision aims to maintain current fuel prices at their present levels, with gasoline and diesel currently averaging around 1.84 euros/l and 1.70 euros/l, respectively.
The OPEC+ alliance, which accounts for half of global oil production, has been cutting production by two million barrels per day since the beginning of 2023. Additionally, some members have kept four million barrels underground since the end of 2022. This strategy has helped keep oil prices between $75 and $85 per barrel as global oil consumption continues to rise.
However, reducing production further is challenging for some countries within OPEC + because they have no guarantee that prices will increase again when needed. In contrast, non-OPEC countries like the United States have increased their production to meet growing global demand for oil. This delicate balance in the oil market is likely to continue due to ongoing geopolitical tensions such as the conflict between Russia and Ukraine.
In summary, while there may be rising demand for oil in the near future, it is unlikely that there will be a sudden increase or decrease in fuel prices due to this equilibrium in the oil market. Consumers can expect a stable environment for fuel prices in the foreseeable future.
