This is the first time I see such confusion in the oil market.

There are mixed feelings among traders and analysts on the advantages and disadvantages of the OPEC+ decision, and a lot of uncertainty. It’s the first time OPEC+ has publicly announced a long-term roadmap. Announcing an increase in production of 300, 000 b/d for an individual country and extending the voluntary cuts for only three months sends negative signals to the market and it has resulted in a $4 drop within three days. The market will correct eventually, but if the downward trend continues for another 10-14 days, you can calculate the loss by multiplying Saudi Arabia’s production by $4.

Would it have been realistic for OPEC+ to sustain supply cuts of this scale?

I’m not against the idea of adding more oil into the market, but my concern is the timing and manner of the announcement. Countries like the UAE and Iraq have spent billions to increase their capacity, and so they do need to see returns on these investments at some point. All of us, including Oman, need to see our total production going to export since we need the revenues. I’m sure there will eventually be an exit strategy for this deal, but determining the right time and method for exiting is crucial.

So why do you think they did it all now?

I don’t really know. I was surprised, like everyone else. It’s not something we usually see from OPEC. But that was the decision, and these are the consequences. We could have gradually introduced portions of this decision to the market, not affecting prices so dramatically. The best decision would have been to announce that the group would continue cutting total production until the end of 2025, and then come October, the JMMC meeting could have said for example, that they would start gradually adding barrels into the market.