Over the past week, prices for Natural 95 gasoline and diesel fuel in Poland recorded a slight decline. The price of Natural 95 dropped by 1 grosz per liter, while diesel prices decreased by 3 groszy per liter. Meanwhile, the price of Brent crude on the Rotterdam exchange remained almost unchanged, falling just 60 cents per barrel.
OPEC+ Eyes Market Share, Plans to Ramp Up Output
OPEC+ is planning to increase oil production starting in July 2025, with the aim of pushing prices below $60 per barrel to undercut American shale oil producers. U.S. shale companies, already struggling with rising inflation-driven costs, wastewater management issues, and tightened environmental regulations, require oil prices above $60 to justify drilling new wells. By lowering prices, OPEC+ hopes to regain lost market share from the U.S. and rein in member states exceeding production quotas, such as Iraq and Kazakhstan.
This approach mirrors the 2014 oil price war, when OPEC flooded the market to drive down prices, leading to bankruptcies in the U.S. shale sector. While the American industry has since improved in efficiency and cost control, smaller producers may still be vulnerable to a new price war. Larger oil majors, however, are expected to weather the storm thanks to stronger financial standing.
Risks for Both Sides
The strategy also comes with risks for OPEC+ members themselves. Many rely on high oil prices to balance state budgets—Saudi Arabia, for instance, needs prices above $90 per barrel. The current market environment, complicated further by concerns over a global economic slowdown triggered by U.S. tariffs, makes the situation even more delicate.
Environmental and logistical issues are also impeding production in the U.S. In Texas, restrictions on wastewater disposal are limiting output, slowing the pace of growth. The International Energy Agency (IEA) has downgraded its forecast for non-OPEC supply growth, suggesting U.S. shale production may soon peak. OPEC+ may exploit these weaknesses to boost its market influence, but doing so could jeopardize its own financial stability.
Short-Term Outlook: Fuel Prices May Rise Again
Currently, oil prices are holding steady at mid-April levels. Back then, prices for diesel and Natural 95 gasoline increased by 15 groszy per liter in the second half of the month. If crude oil prices remain elevated, fuel prices could return to those levels, implying a likely increase of 6–8 groszy per liter in the near term.
Commentary by Marcin Wawrzkiewicz, Country Manager of Malcom Finance in Poland
Source: CEO.com.pl
