OPEC+ Struggles to Reverse Declining Oil Prices

The recent decision by OPEC+ to implement deeper production cuts has not had the desired impact on crude oil prices, which are still significantly lower than before the announcement. Doubts about the commitment to further cuts have arisen due to the failure of previous production restraints to boost Saudi revenue. The market is skeptical about the effectiveness of production cuts in the face of increasing non-OPEC production, particularly from the United States. The recent agreement by OPEC+ for voluntary production cuts by eight countries, including Saudi Arabia and Russia, has not been seen as credible, leading to a decline in oil prices. Saudi Arabia may need to reconsider its production strategy and reclaim market share to maximize revenue, despite the short-term impact on prices. Russian President Putin's visit to Saudi Arabia is likely aimed at delaying any decision to retake market share. Both leaders may also have political motivations for avoiding a sharper dip in oil prices.