Contrary to almost all expectations, compliance with OPEC’s output quotas has been good so far. However, game theory suggests that higher oil prices increase the pay-off from cheating on the deal, which means that compliance could fall in 2018. What’s more, a surge in non-OPEC production, especially from the US, means that the group may be forced to end its current production deal at the end of the year as planned or suffer a further reduction in market share.
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