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Pump, pump, pump pump it up! is what American oil producers have been saying for five years straight, since a prodigious increase in crude oil production in shale country helped make the US the largest crude pumper in the world.
Traditional oil power OPEC, a cartel led by Saudi Arabia, has been cutting supply to prop up prices that began falling in mid-2022, with Saudi Arabia alone extracting nearly a million fewer barrels per day by the time 2023 was over. Does the US care? Nope!
“US oil supply growth continues to defy expectations,” the International Energy Agency said in its latest Oil Market Report, released Thursday (Jan. 18). The US is producing more oil than any country in history, some 13 million barrels of it per day, and all those barrels are coming at OPEC’s expense. Combined with record production in Brazil and Guyana (whose oil resources are the key to an escalating diplomatic row with Venezuela), as well as the defection of OPEC member Algeria, the global oil supply marketshare of OPEC+ (OPEC and a select group of allies) sits at about 48%, the lowest since the “plus” was added in 2016.
Those non-OPEC countries don’t seem keen to slow down in 2024, but if OPEC wants to fight to regain that marketshare? That could only make the prices fall further.
“While OPEC+ supply management policies may tip the oil market into a small deficit at the start of the year, strong growth from non-OPEC+ producers could lead to a substantial surplus if the OPEC+ group’s extra voluntary cuts are unwound,” the IEA report said.
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