OPEC’s Existential Crisis May Rattle Oil Market

Yemisi Izuora
There are seeming uncertainties that are about unsettling global oil market fundamentals which is currently looking particularly bullish, from the Organization of Petroleum Exporting Countries, OPEC + production cuts, to the constraints of exports in Nigeria and the U.S. sanctions on Iran and Venezuelan.
While oil price volatility has increased due to financial analysts putting an emphasis on Trump’s apparent Twitter agreements with OPEC leaders, market fundamentals are still very bullish. Until the global market realizes that U.S. oil storage reports are not the be all and end all for oil prices, volatility will remain.
The market is about facing a new threat as OPEC+ prepares to meet at its June 25-26thMinisterial Meeting in Vienna. The internal cohesion of OPEC is being called into question at present, as several major member countries are facing not only external sanctions but threats of a total internal implosion of their respective regimes.
The removal of U.S. waivers for leading oil importers of Iranian oil and gas is putting the Tehran regime under severe pressure. While Trump’s target of reducing Iranian production to zero is unrealistic, the impact of the sanctions is undeniable.
According to report by Oil.Com, no new oil contracts have been reported between Iran and its main clients, China and India, since the sanctions as it seems that the fear of indirect sanctions by the U.S. is already having its desired result, Iran’s hydrocarbon exports have been hit hard and seem to have no response. Reports about Iran having trouble to pay not only its own bills, but also its proxies in Lebanon, Syria and Iraq, also show that the regime is struggling.

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