This article supplied by Troy Media.

By Rashid Husain Syed

OPEC+ launches a crude oil price war, and everyone will feel the pain

The gloves are off. OPEC+—the alliance of major oil producing countries led by Saudi Arabia and Russia —has abandoned its price-support strategy. Instead, it’s flooding the market to punish overproducers and claw back market share, regardless of the consequences.

For three consecutive months, despite falling prices, OPEC+ has ramped up output, bringing back 1.37 million barrels per day to the market. Until recently, it had withheld 5.3 million barrels per day—about five per cent of global supply—to stabilize prices. But that restraint is vanishing fast. The group is now rolling back voluntary cuts at high speed, opening the taps just as global markets are showing signs of oversupply.

Geopolitical developments are adding fuel to the fire. A possible breakthrough between Iran and the United States could put even more crude back into circulation. Meanwhile, Russia continues to find ways to move oil despite sanctions.

On top of that, U.S. production hit an all-time high in March at 13.499 million barrels per day, surpassing the previous record set just months earlier. Shale producers in the Permian and Gulf Coast regions continue to churn out oil, even as drilling slows elsewhere.

This rising tide of supply spells trouble for all producers, but it presents a unique challenge for jurisdictions like Canada, where oil sands production is a major driver of jobs, investment and government revenue.

Oil sands projects require massive upfront capital and long lead times, making new investments harder to justify in a weak price environment. Yet once built, these operations are remarkably resilient, with low ongoing costs and long production lifespans.

Major Canadian producers like Canadian Natural Resources can remain profitable even when West Texas Intermediate—a key oil price benchmark—falls into the low-to-mid US$40s. That long-term efficiency offers a structural advantage over U.S. shale, which depends on constant reinvestment. Still, prolonged low prices can stall future oil sands development and weigh on government budgets.

Meanwhile, demand is faltering. U.S. consumption dropped to its lowest level in a year, with total petroleum products supplied falling to 19.95 million barrels per day, a red ag for refiners heading into the crucial summer driving season.

Hopes that India might offset global demand weakness are fading. While its economy is growing, “India’s volumes aren’t anywhere near the Chinese boom in consumption that began in the early 2000s,” wrote Tsvetana Paraskova in Oilprice.com. Those who expected India to be the “next China” are in for disappointment. Between 2000 and 2025, Chinese crude demand growth averaged 485,000 barrels per day, noted Bloomberg opinion columnist Javier Blas. In contrast, India’s crude demand growth is just around 200,000 barrels per day annually, less than half of China’s booming growth during the 2000s and 2010s.

This growing mismatch between surging supply and tepid demand is already taking its toll. Brent price forecasts have been revised downward for the third straight month. Analysts now expect it to average just US$66.98 in 2025. U.S. crude is forecast to average US$63.35. These are bleak numbers for producers across the board.

As Rystad Energy’s Jorge Leon puts it, “Three strikes from OPEC+, and none were softballs. May warned, June confirmed, and July fires a shot across the bow.” The message is clear: OPEC+ is done playing nice.

This is a direct challenge to North American shale and high-cost producers like Canada. With the market saturated and demand falling short, the price pressure is mounting. Unless producers adapt quickly, they’re in for a punishing stretch.

The global oil market is being reshaped in real time, and the consequences will be felt in boardrooms and across national economies.

Toronto-based Rashid Husain Syed is a highly regarded analyst specializing in energy and politics, particularly in the Middle East. In addition to his contributions to local and international newspapers, Rashid frequently lends his expertise as a speaker at global conferences. Organizations such as the Department of Energy in Washington and the International Energy Agency in Paris have sought his insights on global energy matters. 

Troy Media empowers Canadian community news outlets by providing independent, insightful analysis and commentary. Our mission is to support  local media in helping Canadians stay informed and engaged by delivering reliable content that strengthens community connections and deepens understanding across the country.

If Alberta were to adopt a mutual recognition act with the rest of the country, similar to Nova Scotia’s, Canada’s economy would stand to grow significantly, according to a new Economic Note published by the Montreal Economic Institute.

“The growing momentum to eliminate internal barriers to trade in Canada is promising,” says the publication’s author, Trevor Tombe, professor of economics at the University of Calgary and senior fellow at the MEI. “If Alberta were to join the growing interprovincial free trade zone started by Nova Scotia, both it and Canada would be much more prosperous.”

Different regulations, certifications and testing requirements between provinces add costs, complexity and frustration to the process of selling goods and services across provincial boundaries. These many rules are commonly referred to as “interprovincial trade barriers.” Following U.S. President Donald Trump’s tariff threats, governments across Canada have identified the reduction of these barriers as a way to make the country’s economy more resilient.

Nova Scotia Premier Tim Houston was the first to recommend a model of mutual recognition of standards (without further testing or fees) and accelerated licensure of professional credentials with provinces that reciprocate. This would essentially render moot the vast majority of barriers
to interprovincial trade with provinces that adopt similar legislation. On March 26, 2025, Nova Scotia’s Free Trade and Mobility Within Canada Act received royal assent, becoming law in the province.

“The main benefit of mutual recognition policies is that they bypass the regulatory gridlock that has long plagued interprovincial trade discussions,” said Dr. Tombe. “It’s a trade first, harmonize later approach that allows Canadian consumers and businesses to begin to reap the benefits of these agreements without delay.”

Since then, Premiers Doug Ford and Rob Lantz, of Ontario and Prince Edward Island respectively, have tabled similar bills in their provinces.

So far, the Acts adopted and mutual recognition agreements signed are leading the way to internal free trade zones with the potential to boost the country’s economy substantially. The gains from free trade between Ontario and Nova Scotia alone, for example, could boost the Canadian economy by nearly $4.1 billion.

If Alberta were to adopt a similar bill to those of Nova Scotia, Ontario and Prince Edward Island, or sign mutual recognition agreements with all Canadian provinces, the country’s economy could grow by an estimated $72.1 billion.

Of particular interest, the signing of an agreement between Alberta and British Columbia alone would boost Canada’s GDP by an estimated $25.7 billion.

“Premier Danielle Smith should follow Nova Scotia Premier Tim Houston’s approach and adopt mutual recognition laws with the rest of the country,” said Dr. Tombe. “It’s one of the surest and lowest-cost ways for provincial governments to unleash Canadian productivity growth.”

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The MEI is an independent public policy think tank with offices in Montreal, Ottawa, and Calgary. Through its publications, media appearances, and advisory services to policymakers, the MEI stimulates public policy debate and reforms based on sound economics and entrepreneurship.