OPEC+ Frets Over U.S. Oil Output Growth Under President Trump
Date
12/18/2024 7:07:13 AM
(MENAFN- Baystreet)
The OPEC+ group is wary that coming deregulation in the U.S. energy sector could boost U.S. oil production higher than forecast under incoming President Donald Trump, OPEC+ delegates have told Reuters.
More U.S. oil supply could further erode OPEC+'s market share and weigh down on oil prices, which the OPEC cartel and its allies are desperately trying to support with production cuts.
President-elect Trump's return to the White House would likely mean less stringent environmental policies for the industry,“but we may see higher production in the United States, which is not good for us,” a delegate from an OPEC+ producer which is an ally to the United States told Reuters.
Although the U.S. industry has signaled no major wave of supply surge is coming, Trump's friendly policies toward the sector could boost production to higher levels than expected previously.
Team Trump is preparing to make sweeping changes to the U.S. energy sector on day one. Boosting U.S. oil and gas drilling and accelerating permits for domestic energy infrastructure and LNG exports are expected to be top priorities for the new administration.
U.S. shale output growth has slowed and may never hit a 1 million barrels per day (bpd) annual increase again, as it did before Covid, as companies are now more focused on growing shareholder returns than growing production.
U.S. crude oil production continues to rise and will rise in 2025 over 2024, too, all forecasters and analysts say.
But“drill, baby, drill” is unlikely under Trump-a comment coming from none other than ExxonMobil.
Yet, the incoming administration could sway the global oil market balances and with this, the OPEC+ production policy going forward.
For example, tightening the screws on Iran and Venezuela with stricter enforcement of the U.S. sanctions could reduce supply from these countries. This could open the door for Saudi Arabia and the other OPEC+ producers to justify an increase in their supply.
By Tsvetana Paraskova for Oilprice
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