How did new oil production in the North Sea put downward pressure on oil prices in the 1980s?

In the 1980s, the global oil market experienced a significant softening, which placed downward pressure on prices. This shift was driven by a combination of reduced demand—caused by economic recessions in the United States and Western Europe, as well as increased energy conservation—and a notable rise in oil output from non-OPEC regions, most significantly the North Sea.1

As production from these new non-OPEC sources increased, the global supply of oil grew, challenging the market dominance previously held by OPEC. During the 1970s, Saudi Arabia had acted as a "residual supplier," cutting its own production to stabilize prices when demand slackened. However, as North Sea production expanded and OPEC's collective output faced downward price pressure, Saudi Arabia became increasingly unwilling to bear the burden of production cuts alone. This influx of non-OPEC oil, coupled with the difficulty of coordinating production quotas among OPEC members, contributed to a sharp decline in oil prices, which fell to less than $10 per barrel by 1986.12