Growing oil surplus hits prices and clouds OPEC+ plan

Significance A growing oil surplus will likely push prices lower in 2025, forcing OPEC+ to consider deepening rather than unwinding production constraints. Although economically and politically risky, OPEC+ may accept a prolonged period of lower oil prices to discourage price-sensitive non-OPEC+ oil output, allowing the cartel, eventually, to reassert monopolistic power as oil demand growth weakens. Impacts Lower oil prices will retard the energy transition in developing countries. Oil producers face lower revenues, which will curb upstream investment and limit the budgetary capacities of petro-states. Lower oil prices will impose greater strain on Russia's public finances. New energy transition technologies, such as sustainable fuels, will look more expensive relative to fossil fuels.