The Organization of the Petroleum Exporting Countries (OPEC) and its ten allies, collectively known as OPEC+, continue to grapple with a decline in oil prices despite months of production cuts and a recent commitment to further reduce output.

Despite OPEC+ implementing supply cuts exceeding five million barrels per day (bpd) since the end of 2022, oil prices remain at their lowest level in nearly six months, hovering below $80 (R1465) a barrel. This comes even after a recent uptick attributed to concerns over drone and missile attacks by Huthi rebels affecting shipping routes through the Red Sea and Suez Canal.

OPEC’s struggle to stabilize prices is compounded by various factors, including a surge in US crude production, global efforts to transition away from fossil fuels, and reported internal discord among member nations. The alliance’s unity has been questioned, with frictions laid bare during recent discussions, leading to delays in the November ministerial meeting and dissatisfaction expressed by Angola and Nigeria regarding their production quotas.

Analysts argue that OPEC’s lack of unity has fueled skepticism about the effectiveness of the announced cuts. Swissquote analyst Ipek Ozkardeskaya noted, “Unity is what’s needed to give a stronger legitimacy to the group” and its decisions.

Founded in 1960, OPEC expanded in 2016 to include 10 additional producers, forming OPEC+. However, this enlargement has proven to be a “double-edged sword,” making decision-making more challenging. The International Energy Agency (IEA) reported that as a result of supply cuts and various political crises, OPEC+ now holds only 51% of the oil market, the lowest since its creation.

Moreover, OPEC+ faces challenges from the green transition, with an increasing number of countries calling for a shift away from fossil fuels due to climate change. OPEC Secretary-General Haitham Al Ghais urged members to reject language targeting fossil fuels at the COP28 summit in Dubai. Analysts emphasize the urgency for OPEC, particularly for Riyadh, to sustain oil-derived government revenues, crucial for financing economic diversification programs.

As OPEC+ navigates internal discord, external pressures, and the growing global shift towards sustainable energy, the future remains uncertain for the once-dominant oil cartel.