A New Era of Cheap Oil is Coming

The World Bank predicts a 21% drop in oil prices by 2025, followed by an additional 6% decline in 2026 due to falling commodity prices, media reports indicate.

The OPEC policy aimed at curtailing supply through the introduction of production and export quotas is nearing its end. Further reductions in production will only worsen the situation for the countries involved in the agreement and will have virtually no effect on the overall volume of supply in the market.

No one can currently say what the equilibrium price will be, as the excess capacity is quite substantial. The market could accommodate an additional 3-5 million barrels per day, which is significant, so in a year and a half, a price of $40 may no longer seem excessively low.

The global oil market will gradually come under the control of suppliers who will ensure lower prices due to lower extraction costs.