OPEC’s market share of the world oil market has fallen to 30 percent, the lowest percentage in years, due to supply constraints and involuntary losses in Iran and Venezuela, with a slight hesitation by the producer about the production cut strategy.
Oil prices fell from the highest level in April 2019 at $75 per barrel to $60 despite supply cuts by OPEC members, amid pressure of global recession and concerns about the trade war escalation between the U.S. and the China.
Crude oil from OPEC organization reached 30 percent of the world’s oil supply in July for the current year, down from more than 34 percent since 2009, and a peak of 35 percent seven years ago, according to the data published by the OPEC organization.
Low prices, if continued, and the erosion of their market share may raise the question of whether continued supply restrictions are in the best interest of producers or not, as OPEC and its allies have an agreement to limit oil supply until March of the following year.
OPEC, Russia and other producers narrowed the supply for most of the period since January 1, 2017. This alliance, which is known as OPEC+, renewed their agreement last month till March next year.
Although the prices have been boosted by this agreement, but OPEC’s market share was sharply affected to keep falling over last two years.
Global supply increased by 2.7 percent to 98.7 million barrels per day, while OPEC crude production fell 8.4 percent to 29.6 million barrels per day.
As of 10:35 GMT, Brent crude futures rose 0.61 percent at $60.66 a barrel for the delivery of October, while West Texas futures was 0.61 percent up at $56.02 a barrel.
U.S. Energy Information Administration data released on Wednesday showed
that U.S. crude inventories fell for the first time in three weeks in the week
ended August 16, down 2.7 million barrels to 437.8 million barrels.