A ‘crude’ game is afoot

An interesting tussle is on within the expanded Organisation of Petroleum Exporting Countries, the OPEC+. To some, propping up the market prices is of utmost importance, while to others, increasing their market share is of optimal interest. And the two objectives are diametrically opposed to each other. While Saudi Arabia, in conjunction with Russia, is striving hard to put a floor beneath the crude markets by cutting their respective output, countries like Iran and Venezuela are targeting to increase their production and gain back some lost market share at a point in time when output is reportedly recovering in both Kazakhstan and Nigeria. Crude oil markets are torn between these two conflicting and contradictory plays. The Wall Street Journal reported in early July that courtesy of the $30 per barrel discount offered by Tehran to its regular customers, Iran’s exports have surged to the highest level in nearly five years. Iranian exports touched the 1.6 million barrels per day (bpd) mark in May and June. That’s more than twice the amount of oil sold during the same period last year, and it’s the highest volume of oil Iran has exported since the US reimposed strict sanctions on the country in 2018. It is significantly up from 250,000 barrels in 2019 and 2020.