Oil prices could plunge to US$30 a barrel in 2018 and maintain that low price for some two years, if OPEC fails to make steeper output cuts.The current OPEC cuts could be enough to keep the price of oil at around US$50 per barrel for the rest of this year.But next year, new supply is expected to overtake demand growth if OPEC doesn’t deepen the production cuts. This would send oil prices lower.

Last week, the International Energy Agency (IEA) said that non-OPEC production in 2018 would increase by 1.5 million barrels daily – a rate that would surpass the growth of global demand.

The key question for the oil market is whether U.S. shale production had a limit. If there is a limit, OPEC’s cuts might work, but if there isn’t a limit, or if shale output in Argentina surges, OPEC’s strategy with the cuts would fail.

In 2018, the surplus is expected to grow, due to higher production in U.S. shale, Nigeria, Libya, and Kazakhstan. Russia, on the other hand, would be a wild card, because upstream investments are expected to increase there.

If Saudi Arabia believes there is a limit to US production, they will cut… critical decisions will have to be taken [by Riyadh] in the middle of next year or towards the end of next year.

Despite the fact that OPEC and non-OPEC partners rolled over the cuts into March 2018, the oil market wasn’t enthusiastic about the extension as-is, and oil prices have dropped some 13 percent since the cuts were extended.