OPEC+ has tricky balancing act keeping $40/b oil price floor

OPEC+ will not want to undo the stability it has brought to crude prices. The oil exporting alliance must now find a way of increasing production while not flooding a fragile global market. Whether it pulls it off could depend on the strength of demand from its key Asian customers.

After having slashed output by 9.7 million b/d since May, OPEC and its partners in a coalition led by Saudi Arabia and Russia, relaxed their cuts to 7.7 million b/d as of August 1 and through the end of the year.

But where will all this extra crude go? Asia is the primary target market for much of the alliance’s heavy sour crude and OPEC+ is optimistic that they will snap it up as their economies recover.