Saudi Arabia and its allies in the expanded OPEC+ group of oil-exporting nations have only just started to implement output cuts, so it might seem premature to start talking about the need for an exit strategy.
But an important part of being a successful market manager is about knowing when to increase production and capacity to forestall excessive investment by rivals and potential rivals.
OPEC’s biggest problem has always been increasing output in a timely manner after a price slump – rather than continuing to withhold supply in the hope of even higher prices.
Following output reductions in 2009, 2017 and 2019, Saudi Arabia and its allies restrained production too long and allowed prices to rise too high.
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