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Record-Breaking Oil Output by ...

OIL AND GAS

Record-Breaking Oil Output by the US has dealt another blow to the OPEC

Breaking Oil Output OPEC
The Silicon Review
06 December, 2023

The current state of affairs has resemblance to the period between 2014 and 2016

As OPEC was attempting to raise benchmarks by implementing more drastic production cutbacks, record crude oil production in the US is dealing a new blow to oil bulls. The average daily output in September did not change from August, when it reached the record-high pace of 13.24 million barrels, according to an EIA data released last week. Amid cost inflation and declining global energy prices, this is taking place. Furthermore, American shale drillers have no intention of cutting back on drilling. The current state of affairs has resemblance to the period between 2014 and 2016, during when the oil prices plummeted by 70% due to OPEC's retaliatory production rise, spearheaded by Saudi Arabia, aimed at undermining U.S. shale producers and driving down prices.

However, there are also a number of notable differences in the current circumstances. Because of their consolidation, American producers are now far more resistant to price wars. In addition, it is likely that Saudi Arabia and its Gulf allies are less willing to take risks now than they were in 2014, when the oil price crisis forced the governments of the Gulf to enact austerity measures for the first time in their long history. It did not sit well with them. The two main themes in the industry now are discipline and caution when increasing production. In fact, officials claim that improved well productivity rather than increased drilling is largely responsible for this year's production boost.