The OPEC+ group of oil producers celebrated their fifth birthday in early December. It’s been a turbulent time — more so than they could have imagined when they first came together to face the threat posed by the U.S. shale boom back in 2016 — and the future doesn’t look much easier.
On the verge of collapse in 2020, OPEC+ was saved by the Covid-19 pandemic and the need for a coordinated response to oil-supply management in the face of an unprecedented slump in demand. They have risen to that challenge with remarkable cohesion. Their next one will be continuing to stick together as the world’s need for oil tests their production limits.
Faced with a slump in oil prices, which had fallen from $110 a barrel in mid-2014 to less than $30 by early 2016, and soaring oil stockpiles, the 13 members of the Organization of Petroleum Exporting Countries agreed in November 2016 to cut production by 1.2 million barrels a day and called on non-member countries to support them with additional reductions.
A group of 11 countries — including the three biggest former-Soviet producers, Russia, Kazakhstan and Azerbaijan — agreed to reduce their collective output by almost 560,000 barrels a day from the start of 2017.
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