Updated 03:40 PM EST, Thu, Nov 26, 2020

Opec's Oil Glut Crisis: Facts, Figures & the Truth

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The oil glut crisis has got the entire world worried as US stock markets continue to plummet.

According to the Wall Street Journal, the strong oil output in the Middle East and the United States has caused the extreme reduction of oil prices, the lowest recorded in more than 10 years.

It highlighted that the global oil glut has already pulled the price of an oil barrel by almost 60 percent in the last 18 months.

In addition, Bloomberg mentioned that the cause of the overwhelming supply could be attributed to the oil pumping more than the required levels as well as the Organization of Petroleum Exporting Countries (OPEC) abandoning its output ceiling last month.

The same report said that despite an agreement between OPEC and its rivals, the crisis continues to threaten the globe.

"It is crucial that all major producers sit down to come up with a solution to this," said OPEC secretary-general Abdalla Al-Badri.

He claimed that that the stocks of oil in some countries were 260 million barrels more than their estimated average for the end of 2015.

Al-Badri, however, said that the market may soon recover and balance itself again when an expected growth in demand happens this year.

"The current environment is putting this future at risk. At current price levels, it is clear that not all of the necessary future investment is viable," he added in a similar Business Insider report.

Meanwhile, BBC said that Opec member Saudi Arabia has refused to cut their production of oil, despite the crisis.

Al-Badri also blamed non-Opec members for the global oil glut.

He noted that though the organization was responsible for the additional supply in 2015 "majority of this has come from non-Opec countries."

According to Telegraph, OPEC has decided to embrace its competitors and talk about the solutions for the oil glut.

Al-Badri has warned the public that this current crisis could result in a supply shock in the future.

He explained that prices could shift from one extreme end to the another and that the problem should be addressed right now.

In line with this, The Australian reported that Russia has expressed its willingness to work with OPEC when markets are able to rebalance a year after.

It was also noted that the decision to agree on a deal with OPEC greatly depends on Russian President Vladimir Putin.

The country's leader has reportedly considered oil as a small factor in the problem.

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