THE OPEC is regaining control of the global oil market as the US shale “revolution” begins to moderate, according to oil industry executives who have warned that the coming months will see higher oil prices.

Despite recent record profits, US shale industry chiefs told the FT that rising costs and investor pressures to return cash to shareholders will continue to limit the pace of US supply growth.

This bleak outlook contrasts with the conditions of the previous decade, when the US shale market was able to rapidly increase production. But now it has lost this ability and as a result the market share is increasing in favor of OPEC and in particular Saudi Arabia which has the main control of the cartel.

“I believe that the three countries now have the upper hand and this will continue for the next 25 years. First is Saudi Arabia, second is the United Arab Emirates and third is Kuwait,” says Scott Sheffield, CEO of Pioneer Natural Resources, the largest shale producer in the U.S. USA.

“We are on the razor’s edge. That is exactly why he mentioned that I am concerned about this situation, which will become even more serious in the next 12 months. This means that power will return to OPEC if the US continues to stagnate production. We control 10% of the world’s oil production, while o OPEC+ including Russia a much larger share. So they can drive things more than we would like,” says Rick Mancrief, CEO of Devon Energy.

US production recovered slightly after the 2020 crisis, but the current level of 12.4 million barrels per day remains well below pre-pandemic levels. Shale industry executives say the rate of growth will be much slower going forward.

This will result in an increase in OPEC’s influence on the global oil market, the Conoco chief warned.

“OPEC’s market share is expected to increase from 30% today to 50%. The world seems to be returning to what we experienced in the 1970s and 1980s, unless something changes along the way,” he notes.

Source: moneyreview.gr