As the world continues to look to OPEC and its partners for more volumes of crude, gaps between its haves and have-nots are widening.
Its latest rift with estranged oil allies Saudi Arabia and the UAE has dominated market headlines as bigger cracks within the organization are looming.
As the world continues to look to the bloc and its partners for more volumes of crude, gaps between its haves and have-nots are widening.
Even setting aside the UAE’s insistence on a higher output target, plans by the OPEC+ group to lift production could run into many members’ practical limits on how much crude they are able to pump.
S&P Global Platts Analytics estimates that as of June, the alliance holds about 6.35 million b/d of spare production capacity — 590,000 b/d above the current 5.76 million b/d in collective OPEC+ cuts.
That spare capacity is increasingly concentrated in a handful of OPEC+ members, with Saudi Arabia, the UAE and Russia accounting for almost three-fourths of it.
Internal disruptions, political disputes, underinvestment and US sanctions have all contributed to many countries’ inability or unwillingness to drill new wells and invest in infrastructure to keep growing their crude flows.