Increased output will not necessarily lower oil quotes because having high prices are a sign of economic and monetary imbalances, not just a result of the OPEC's decision to reduce production. Gradually ramping it up helps, but does not entirely solve the problem.
In addition, the issues in the oil market stemmed from years of massive misallocation of capital and underinvestment in energy, fueled by extremely loose monetary policies by governments that, for ideological reasons, penalised capital expenditure on fossil fuels.
The massive injections of liquidity also had a side effect, so the energy sector moved from an undervalued consensus to a massive overweight, exacerbating price increases.
As such, oil quotes increased by 60% over the year, despite the fact that supply is growing along with demand.
JP Morgan said that from 2021-2030, the required capital expenditure to meet demand is $ 600 billion.
Political interference also had a serious impact on prices. Threats to ban the domestic development of energy resources in the United States, as well as the banning of investment in fossil fuels in some European countries, have driven up costs. These threats do not come from thorough technical analysis and full-fledged miscalculations of supply and demand, but from political programs.
It should also be known that OPEC will not benefit from high oil prices because supply from the organization and non-OPEC countries grew with demand. The group also lowered estimates for global oil demand in 2021 to 96.4 million b/d per day.
Most likely, the main driving forces are Russia and the United States because without them, production prices would skyrocket, no matter what OPEC members did.
Oil quotes will decline with new technology, investment and diversification, not empty political threats.