Riyadh is walking away from its role as oil market stabilizer, signalling a return to market-share battles that threaten prices and Canadian revenues

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After boosting crude oil output by 411,000 barrels per day (bpd) in May—triple the originally planned volume—OPEC shocked observers by intending to repeat the increase in June, despite slowing global demand and the dampening effects of U.S. trade tariffs.

The decision has ripple effects far beyond the Middle East. OPEC —the alliance of the Organization of Petroleum Exporting Countries and allies such as Russia—collectively controls about 40 per cent of the world’s oil production. Its actions directly influence global oil prices, which in turn affect everything from gasoline prices across Canada to government revenues in resource-dependent provinces like Alberta.

Is OPEC sabotaging itself?

The move contradicts the group’s modus operandi of the past several years. Since 2016, OPEC , led by Saudi Arabia, has tried to balance global oil markets by curbing output. At its peak, the group cut production by more than five million barrels per day—about five per cent of global supply—with Saudi Arabia alone contributing two-fifths of that total.

Riyadh is walking away from its role as oil market stabilizer and that spells trouble for Alberta.

Crude markets plunge amid weak global economy and rising oil production

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