Why is OPEC not cutting output to boost oil prices?

  • Because OPEC's leader, Saudi Arabia, has decided not to.
  • Saudi Arabia is now prioritising its own long-term market share over short/medium-term revenue maxmisation.
  • Oil production costs in US > those in OPEC countries, especially Saudi Arabia, so low oil price is bad for US oil (supply less likely to expand) and hence allows Saudi Arabia to maintain (or even increase) its market share.
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