Oil Cartel shedding its price hawk role in favour of Market-driven strategies

Willing to sacrifice shot term price spikes for preserving market shares

- BY K RAVEENDRAN

OPEC+ appears to be navigating one of its most intricate balancing acts in recent years as it prepares to announce a fourth consecutive production hike. The move, at first glance, seems at odds with its longstanding goal of stabilizing and supporting oil prices. The geopolitical volatility roiling markets—ranging from disruptions in the Red Sea to unpredictable output from sanctioned states

would normally prompt a more conservative stance. Yet, the group’s decision to incrementally boost supply instead signals a strategic recalibration of its objectives, one that prioritises long-term relevance and market share preservation over short-term price spikes. The strategy reveals OPEC+'s growing understanding that clinging too tightly to price floors may risk ceding ground to new players and alternative energy narratives.

The decision to continue with supply increases, even amid international uncertainty and soft patches in global demand, is not without consequence. Traditionally, OPEC+ acted as a price stabiliser, often tightening supply during downturns or uncertainties. That pattern has clearly shifted. These recent production hikes follow a trend of gradual unwinding of previous cuts—a process that began when markets started showing signs of resilience post-COVID recovery. But rather than a straightforward return to the old normal, this current path reflects a deeper pivot in OPEC+'s strategy. It is no longer merely a cartel that manipulates prices through output limitations. Instead, it is evolving into a flexible, quasi-commercial body that gauges the elasticity of demand, geopolitical sensitivities, and future-facing considerations such as the green transition.