Surveying the media recently, I found no one was surprised by the level crude oil prices have fallen, slowly but surely, in recent months. The price of Brent crude oil is down nearly $20 from its June peak to as low as $96 a barrel around mid-September, its lowest since mid-2012. The average price of the Opec (Organisation of Petroleum Exporting Countries) basket of crude oils fell from $110 a barrel on June 18 to $94.68 a barrel on September 17.

Readers of this column may remember the number of times when I questioned what is keeping oil prices at the level they were. The answer was always found in the geopolitical situation in the world and especially in and around some of the producing countries. This reason is indeed strong enough, especially for large and important consumers whose concern about energy security outweighs anything else.

Now the same, if not worse, geopolitical concerns are still around, where in Iraq the Islamic State and other groups opposing the Iraqi government have taken over large swaths of the country, thereby preventing Kirkuk’s oil production and exports and besieging the Baiji refinery, the largest in Iraq and which supplied almost half of the petroleum products to the local market.

Iran is still negotiating with the UN Security Council members plus Germany, and therefore the sanctions on it are still in place. The Ukraine crisis is far from resolved, and although it has not yet affected oil and gas production in Russia, the risk is there.

Libya in spite of its increasing oil production is in flames, as insurgents have taken over Tripoli and the situation at risk of getting worse. Syria is well into its fourth year of mayhem without an end in sight and one can also mention the problems in South Sudan, Yemen and Nigeria as contributing to the worries about the oil market.

Some of these geopolitical problems are attracting outside interference, such as in Iraq and Syria where foreign air forces are conducting raids in aiding one side or another. While the intended purposes are clear, the unintended consequences of such wars can be devastating, especially as all observers believe that this is going to be a long process.

All right then, if the geopolitical situation is so risky, how can we explain the paradoxical movement of oil prices downward? It seems to me that consumers no longer give the same weight to these problems as they do to the more visible exchange rates, where the dollar has strengthened and which makes oil more expensive for others. Similarly, the fundamentals of the economy and oil supply and demand balances are playing their parts.

The economic situation in Europe is still negative and causing further decline of oil demand. There is an apparent slowdown in China which has reduced growth of its demand. Even Japan is slowing down and shedding demand.

All in all, Opec in its September ‘Oil Market Report’ has lowered its estimate of growth in world oil demand this year to 1.05 million barrels a day (mbd), while the International Energy Agency (IEA) has reduced it even further to 0.9mbd, a much lower figure than forecast a few months ago. Even the 2015 forecast stands reduced in the same fashion.

This is happening at a time when non-Opec supplies, especially with the continued increase of tight oil production in the US, are estimated at 1.7mbd in 2014, much higher than demand growth. The result is manifested in increasing stocks and floating storage and a decline in prices. Even Opec production of crude oil in August is at the high level of 30.347mbd in spite of a 0.4mbd reduction from Saudi Arabia in its attempt to stabilise prices.

Those who do not believe that prices can go down further have only to remember that in 2008 prices had fallen from around $140 a barrel to as low as $30 a barrel. In fact most analysts are predicting further price falls to as low as $70 a barrel unless Opec — and perhaps other producers such Russia and Norway — are prepared to reduce production.

The Opec Secretary-General Abdullah Al Badri recently said that the group may lower its oil output ceiling to 29.5mbd from 30mbd when it meets in November. He added: “This is an outlook, not a decision”, as that can only be made by the ministers when they meet. The fact that Saudi Arabia reduced its production unilaterally is another indication that this may be the direction to see in November.

Mind you, the geopolitical factors depending on their evolution might save the day again and send prices back above $100 a barrel as predicted by the Russian Central Bank. Let us wait and see.

The writer is former head of the Energy Studies Department at the Opec Secretariat in Vienna.