It’s raining oil. Gasoline is falling and will continue to fall. We thank Nigeria and Angola (by L. Bianco)

Those who use cars regularly have noticed this for a while now. Petrol and diesel prices are falling sharply. Almost twenty cents down in just over a month. At the lowest since the beginning of 2023. If you are tempted to fill up, however, wait a few more days. Because if the next rise comes, we will know by Thursday. On that day, OPEC+, the cartel that brings together 24 oil-producing states, will meet to decide on a production cut for 2024. Reducing extraction means pumping up the price, and this is convenient for the organisation’s leaders, Russia and Saudi Saudi. But reducing the supply of raw material on the market is bad news for some oil powers such as Nigeria and Angola. In fact, these two African states are to get in the way of production objectives. Their goal? Having your cake and eat it – in this case the barrel – and your wife drunk. Produce a lot while others cut. So you can enjoy the highest prices. But Vladimir Putin and Mohammed Bin Salman are not there.

Business Minister Adolfo Urso rejoices: the drop in prices per liter would be due to the obligation, introduced by his ministry, to display the average regional price to each distributor. Who knows how much truth there is. Consumer associations disagree with the minister’s assessment. But one thing is certain, there is a whole series of international reasons that are helping the price lists to fall. There are refineries all over the planet which, after intermittent production due to post-Covid, have now returned to processing crude oil on foot rhythm, causing their profit margins to fall from $20 to $3 a barrel, explains Nomisma president and energy expert Davide Tabarelli. Motorists and hauliers must also reserve a sincere thank you for Israel and Hamas. The ceasefire, the exchange of hostages and the increasingly remote possibility – making all the necessary predictions – that the conflict in Gaza will spread to various Arab nations or to Iran also contribute to reassuring black gold traders of all the world.

There’s no need to quote who knows what numbers. Compared to the peak at the end of September, the price of crude oil has fallen by 16% in just two months. From almost 100 dollars a barrel, it is now around 80-82. Good news for us consumers. Not just for those who have a car. But also for anyone who shops. The fall in energy prices – closely linked to the price of a barrel – are destined to also contribute to the already ongoing decline in inflation. Bad news, however, for large producers. In the front row, Saudi Arabia – the most influential country in OPEC – and Russia, which together with Ryad forms the command deck of OPEC+, i.e. the 14 oil states that founded the original organization in the early 1960s, and the other ten, led by Moscow, who joined the coordination of the cartel starting from 2016, the year of the first major production cut coordinated at a global level. The expansion of OPEC was decided by the Saudis precisely to make the coordination of the quantities extracted on the oil markets even more effective. Raise production, lower price. You reduce it, you pump it up.

What happened this year? A series of producing countries, not necessarily members of the cartel, have increased production. The United States hit its all-time record. Maduro’s Venezuela, also thanks to Biden’s assist between 2022 and 2023, is strengthening. And crude oil from Brazil and Guyana is becoming increasingly important on the market. These upward movements in production have thus erased the supply deficit forecast by analysts for this year. Indeed, next year, to put it simply, forecasts say that on the oil market there will be more black gold offered than actually demanded. And if we combine this estimate with the slowdown of some of the most important economies in the world – Germany and China to name two – it is easy to predict how the demand for black gold is destined to be less robust than expected just a few months ago, for example at 5 June this year, the date of the last OPEC+ meeting, where further cuts were decided to support prices. Hence the need for some large producers to support prices with further reductions in production. Saudi Arabia and its prince Mbs – Mohammed Bin Salman – need prices that are around 100 dollars or more per barrel to be able to easily finance the vast public investments – in construction and beyond – which are at the basis of the so-called Arab Renaissance , also known as Vision 2030.

Tomorrow should have been the day of the OPEC+ meeting in Vienna, where the new cuts would have been decided under the direction of the Ryad-Moscow axis. But Nigeria and Angola have come to put a spoke in the wheels of Mbs and Putin. The two African nations – founding members of OPEC since its birth in 1960 – have no intention of cutting their respective production as the Russians and Arabs would like. The meeting was adjourned until Thursday. According to Reuters, the negotiating stalemate would be caused by data provided by some independent companies which, on an annual basis, provide OPEC+ not only with the precise quantities of barrels that each state has produced, but also with potential production. On the basis of these data, during the meetings in Vienna, the oil or energy ministers of each state agree on how much production cuts or increases in each state should amount to. According to the governments of Abuja and Luanda, however, this time the data would be inaccurate. Analysts in the pay of OPEC+ estimate the production capacities of the two African states too optimistically, without taking into account, according to the two governments, plants falling apart, recurring strikes and reduced export capacity. Summarizing the negotiating positions of Nigeria and Angola: “The less oil we can produce, the fewer cuts you have to impose on us.” In short, whether they are smart or in good faith, the two African states hope to make the most of the situation: the others cut, the price rises, and the two of them increase production. Collecting more. Negotiations are ongoing, and many analysts predict that a solution will be found by Thursday. In the meantime, motorists and non-motorists alike, let’s enjoy the low prices at the pump.