OPEC+ Launches 'Slow Burn' Oil Price War: A Right Proper Mess, Even Gringotts Would Struggle to Sort This Out!

Another Fine Mess? Oil Cartel Goes Bonkers

Blimey it seems OPEC+ led by Saudi Arabia has decided to stir up more trouble than a Hippogriff on a bad day. Bank of America reckons they've launched a 'slow grind' oil price war. Honestly it sounds like something Voldemort would cook up if he were an economist. After years of playing nice and cutting production they're now planning to flood the market with an extra 411,000 barrels of oil per day for two months straight! Talk about a 'Finite Incantatem' on oil prices.

Trump's Trade War Adds Fuel to the Flames (Literally!)

As if things weren't already complicated enough this oil surge is happening right as Donald Trump's trade war continues to rumble on. It's like Snape deciding to add a dash of boomslang skin to an already volatile potion. Francisco Blanch from Bank of America who sounds like a chap who knows his stuff says the Saudis have a few reasons for this madness. They want to snatch back market share from those pesky American shale producers punish OPEC+ members who've been fibbing about their production cuts and soften the blow of Trump's tariffs on inflation. Sounds like a right old game of wizarding chess doesn't it?

The Long Game: A Year Long Oil Slugfest?

Goldman Sachs thinks the Saudis are shifting their focus from keeping prices stable to giving US shale a good old strategic disciplining. They reckon OPEC+ will pump out another 411,000 barrels in July. Now OPEC+ has had its fair share of price wars over the past 30 years but this one could be a marathon not a sprint. Blanch reckons this 'slow burn' battle could drag on for 12 to 18 months. More like a Basilisk stare than a quick 'Expelliarmus'!

US Shale: Taking a Beating Worse Than Neville Longbottom's Memory

Low oil prices tariffs and the looming fear of a recession are already hitting the US shale industry harder than a Bludger to the face. Citi analysts say that shale producers are starting to pull back. Even Diamondback Energy one of the big boys is worried that US shale production might peak and start to decline. Their CEO Travis Stice said that oil prices are cheaper now than they've been in ages excluding that whole unpleasantness with the pandemic. 'This oil price doesn't work,' they're all saying. Honestly it's like trying to pay for Butterbeer with Knuts in Diagon Alley – it just won't do.

The Price is (Not) Right: Forecasting Future Follies

Bank of America thinks Brent crude might hit $58 per barrel in the second quarter but are holding firm on their $62 forecast for 2025. Goldman Sachs on the other hand has lowered its forecasts by a couple of bucks expecting Brent and US crude to average $60 and $56 for the rest of 2025. Diamondback Energy says they'll halt production growth if US crude prices stay in the $40s and slow down if they're in the $50s. Apparently prices need to be in the mid to high $60s heading towards $70 for production to grow. Merlin's beard it's all as confusing as a Time Turner convention!

This is All a Bit Much Even for the Boy Who Lived

So there you have it. An oil price war trade squabbles and a whole heap of uncertainty. It's enough to make even me Harry Potter yearn for a quiet game of Exploding Snap with Ron and Hermione. Maybe we should all just stock up on Firewhisky and hope for the best. After all as Dumbledore always said 'Happiness can be found even in the darkest of times if one only remembers to turn on the light.' Now where's my wand?