However, the landscape shifted when crude oil prices declined from around $100/barrel in September to approximately $80/barrel amid a market reversal despite tight supplies and escalating tensions in the Middle East.
This abrupt decline followed a shift in market concerns from supply risks to global economic uncertainties and oil demand. Despite OPEC's decision to extend supply cuts beyond December 2023, oil prices haven't responded significantly. The limited impact is attributed to the realization that the supply cut isn't enough to offset non-OPEC output growth. Moreover, lingering worries about a weakening global economy persist.
This drop in crude prices typically signals reduced net realizations for upstream producers, but the government's windfall tax has kept the outlook optimistic.
This tax was introduced in 2022. When crude prices increase, the windfall taxes also rise, and conversely, they decrease when crude prices decline.
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