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Three countries currently account for nearly 40% of world crude oil production and only one of these countries is a member of the Organization of Petroleum Exporting Countries. The three countries are Russia, the United States and Saudi Arabia and, as their influence on oil markets will increase with rising production rates, the OPEC countries will mitigate, at least temporarily. that the so-called troika was now calling the blows more than ever before: the three countries were producing 11 million bpd a day in the north in October, a record high and more than the combined output of the rest of OPEC. And, according to OPEC, this will continue to evolve in an unfavorable direction for OPEC, with the combined production of troika accounting for more than 40% of the global total this year, while share of OPEC falling below 30%.
Three producers have their own oil production policy relatively independent of that of other producers. Admittedly, Saudi Arabia and Russia have been playing on the same team for two years to a large extent because the game strategy has been mutually beneficial. Yet, we have seen many clues showing that the moment when the interests of both begin to diverge is likely to give up the game of the team and pursue its own priorities. In the meantime, the United States has become the main determining factor outside the OPEC + club, with steadily increasing production that could propel it to the top spot in the world next year.
This production will continue to increase only if OPEC now decides to start reducing production. once again to push up prices, further reinforcing the importance of the United States in the global oil market. So, does all this mean that OPEC is as dead? For the moment, mainly yes. Most of its members, as Kemp notes, belong to one or more of the following categories: "struggles under sanctions, mismanagement and unrest; is too small to count; maximizes production rather than participating in production controls; or simply align its production policies with those of Saudi Arabia. " About: $ 50 oil put shale to the test
However, the future remains uncertain. The most respectable forecasters, such as the Energy Information Administration and the International Energy Agency, are optimistic about the growth of oil demand, but the optimistic forecasts are subject to conditions: the IEA recently declared in its World Energy Outlook that producers will have to invest more in new technologies. conventional production must be largely capable of meeting this demand. Otherwise, the United States should increase its shale oil production by at least 10 million barrels a day by seven years to 2025, which is a target bold to say the least.
OPEC members are obvious candidates for some of them. growth of production. Despite concerns about the cartel's available capacity at the beginning of the year, when it became clear that cuts had to be reversed to contain prices, some members, such as Iraq and Libya, are in the process of developing their production. Admittedly, this growth will probably not be close to the million bpd added by US producers in the past year, but it could be substantial in the case of Iraq if the political conditions and price allow.
Venezuela and Iran are unlikely to spend the rest of eternity under sanctions. For the moment, however, it is possible for these two countries to reverse the decline in their production at a given moment. Iran has already shown that it can go up fast enough if it has the chance. In other words, the influence of OPEC on the oil markets may be fading, but it may be too early to bury the cartel forever.
By Irina Slav for Oilprice.com
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