According to claims made by Reuters, OPEC’s share of global crude oil production is set to fall to just over a quarter, potentially limiting its effectiveness as a collective swing producer.
Traditionally, OPEC has managed to maintain a production share of between 30% and 40%, but steadily increasing production in the US shale fields by companies like ExxonMobil and Chevron, the makers of the Mobil and Texaco lubricant ranges, has diminished this.
Despite the low oil prices, US producers have used innovative techniques to get the most from their assets. US oil production averaged 13.1 million barrels per day (bpd) last year, which puts it above Saudi Arabia’s current nameplate capacity of 12 million bpd, although the country is pumping much less due to its participation in OPEC+ cuts and its own voluntary cuts.
Also affecting OPEC production is Angola’s recent announcement that it will leave OPEC due to a dispute over production quotas. Angola produced 1.88 million bpd in 2017, but it currently only produces 1.15 million bpd due to not investing enough in its deepwater fields.
Nevertheless, OPEC has a more optimistic medium-term outlook. Sources suggest it believes that of the 116 million bpd of crude oil that will be needed by 2045, around 40% of it will come from OPEC producers due to a decrease in non-OPEC production.
China, India, the Middle East and Africa are expected to drive demand, with India surpassing China as a major energy consumer due to a slower energy transition and growing population.