For almost two years now, the oil industry has experienced major changes followed by tactful decisions to maintain the industry's performance amid a number of global crises.
Oil refiners in Asia stay on the sidelines as they await price cuts to spot cargo offers after the OPEC+ deal to boost output https://t.co/Vd0YpFNshQ— Bloomberg (@business) July 19, 2021
Discussing challenges facing the oil industry, one cannot forget the unprecedented moment in which oil futures plunged to negative territories in April 2020, which came several weeks after most countries around the world went into total lockdowns in efforts to curb the spread of the novel coronavirus.
The April 2020 plummet has since been a nightmare for oil-producing countries, whose economies rely heavily on this commodity, such as GCC countries, which has consequently granted OPEC+ annual meetings very special importance.
This week, the OPEC+ meeting ended with a long-awaited agreement to increase oil production significantly, so it meets global markets' requirements as business activities return to near-normal levels.
Overcoming a disagreement between Saudi Arabia and the UAE over production rates, OPEC+ countries are going to start producing 400,000 barrels per month starting from August 2021, which is hoped to keep supporting oil prices until the end of the year.
While most oil-producing countries are bracing for years of recovery following signs of controlling COVD19, industry experts are anticipating a steady rise in oil prices until the end of 2021, which can climb as high as $80 USD a barrel.
OPEC and its allies reached a deal to increase oil production, avoiding a potential supply squeeze as economies revive after pandemic lockdowns. https://t.co/tbOQOKXyyJ— The New York Times (@nytimes) July 18, 2021
Besides hopes that the latest agreement could help the industry's rebound following the pandemic, it could also require amendments in case Iran and the western powers reached a new agreement before the end of 2021, which could facilitate the return of Iranian oil into the global market.
Do you think that current global developments point at positive outcomes for the oil industry?
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