09/11/2024
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09/11/2024
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The US is going strong in expanding its oil production and exploring new fields, with little regard for environmental concerns or the potential hazards involved. With the incoming American administration determined to achieve energy independence, the U.S. has the potential to reach and sustain a production level of 20 million barrels per day. The current production of 13.5 million barrels would solidify its position as the world’s largest oil producer, surpassing the current leader.
Shortly, the U.S. could challenge traditional oil powerhouses in the Arab Gulf region and expand its influence in the Asian markets, which have long been the domain of these Gulf producers. At this stage, OPEC+ is largely powerless to take effective action, and with increasing production, the decision made a year ago to gradually increase supply in anticipation of demand growth has proven to be misguided. Demand has not materialized as expected, while producers outside the OPEC+ cartel continue to push for further production increases.
Any potential demand growth is quickly absorbed by these non-OPEC producers, which further contributes to a continued decline in oil prices. On the other hand, a reduction in OPEC+ production would not lead to higher revenues or a larger market share for OPEC+. As a result, OPEC+ has become more of an observer in the market for the time being. With more oil flooding the markets, OPEC+ producers, who are heavily reliant on oil revenues, are facing the need to adjust and reduce expenses. There is hope that oil prices will strengthen in the future, but the outlook for 2025 remains uncertain. The hope is that oil prices will not fall below $70 per barrel.
By Kamel Al-Harami Independent Oil Analyst
Email: [email protected]
