Could OPEC’s Control Of Oil Supply End?
OPEC controls about a third of world’s oil supply but this could end in this decade. That is if the US oil drillers can get the greenlight to export its oil. According to estimates, the US could produce up to 14.2 million barrels per day by 2020. Of course, OPEC will continue to fight the battle and try to keep its market share up.
Today, the oil price is way below $80 per barrel. This proves to be a challenge for the US oil and gas industry which has to compete with the lowering prices amidst the rising expenditure in fracking. Still, according to a report recently published by Citibank, “The consequences for Opec are severe and growing.
Most Opec countries produce medium to heavy and sour crude oil streams and the refinery system in the US Gulf of Mexico has been the most attractive market in the world for them…But now the loss of market share has become inevitable, increasing competition for access to China’s more limited market and weighing on global oil prices.”
Terry Smeader
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