OPEC’s market-shaping influence over global oil prices may be waning, according to the Head of Petroleum Analysis at GasBuddy, Patrick De Haan, during his appearance on CNBC’s Fast Money.
De Haan highlighted the challenges facing OPEC, particularly its ongoing struggle to maintain higher oil prices.
“OPEC’s relevance likely has been reduced. They are continuously fighting lower prices,” he stated.
Citing recent market trends, De Haan pointed to West Texas Intermediate crude oil prices, which have remained around $70 per barrel, showing little indication of surpassing that threshold.
“WTI today is about $70 per barrel and really struggling to get anything above that level,” he observed.
The expert also noted uncertainties surrounding OPEC’s production strategies, mentioning a potential output increase slated for April 2025. However, he suggested that this timeline could be delayed further.
“It will not surprise someone if they continue to push that to July or potentially till the end of 2025,” De Haan said, highlighting the unpredictable nature of OPEC’s decisions amid fluctuating global energy dynamics.
Looking ahead, De Haan forecasted that the oil industry’s challenges would disproportionately affect different sectors. “I think next year will be more of a struggle for the upstream than it will be for the downstream,” he added, pointing to potential difficulties for exploration and production activities compared to refining and distribution.
The shifting global energy landscape has diminished OPEC’s once-dominant position.
Historically able to influence global oil markets through coordinated production adjustments, the cartel now faces challenges from multiple fronts.
The rise of alternative energy sources, growing investments in renewables, and the emergence of non-OPEC producers, especially the United States with its booming shale oil production, have reduced OPEC’s control and often undermined its efforts to stabilize prices.
De Haan’s comments reflect a growing sentiment among industry analysts that OPEC’s strategies are becoming less effective in a rapidly evolving market.
The cartel’s decisions, once able to trigger immediate global reactions, are now often met with muted responses as market participants account for diverse supply sources and technological advancements.
