19th December 2024 (15 Topics)
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Opec+ Concern about Rising US Oil Production
Context
OPEC+ are now worried about the United States, which has become the world's largest oil producer.
The Situation:
- US Oil Production Growth: The United States has dramatically increased its oil production in recent years, mainly through shale oil Since 2022, US production has grown by 11%, and it now produces about 21.6 million barrels per day (bpd), up from about 10 million bpd just 11 years ago.
- Opec+ Output: Opec+ currently holds back 85 million bpd from production to manage prices. Opec+ now controls only about 48% of the world's oil supply, which is its lowest share since 2016, when it was over 55%.
- Why Opec+ is Concerned?
- US Influence on Oil Prices: With rising US oil production, Opec+ has lost some of its influence over global oil prices. If the US continues to increase its output, it could lead to lower oil prices, which would hurt Opec+ countries that rely heavily on oil revenue.
- Trump’s Potential Impact: If Donald Trump returns to the White House, Opec+ fears that his pro-business and deregulatory policies could encourage even more oil production in the US. Trump's administration would likely ease environmental regulations, allowing more oil drilling, which would increase supply and potentially reduce global oil prices.
- Trump's Election Campaign: During his campaign, Trump focused on lowering energy prices and inflation, which he believes could be achieved by increasing oil production in the US.
OPEC+
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