OPEC+ will return to power over the global oil market

By Rhod Mackenzie

According to Alexey Gromov, the chief director for energy at the Institute of Energy and Finance, shale oil production in the United States has already peaked and will decline after 2025. This will shift the power back to the OPEC+ alliance, which is currently struggling to manage the market.
Many experts agree that the American shale industry will gradually shrink after 2025. It reached its peak in the last couple of years and will plateau in terms of production volumes in the coming years before continuing to decline. There are no new oil resources in America. Therefore, it is important to understand that market power will return to the Arab countries, the core of OPEC+. The expert answered the question of whether the United States will displace OPEC+ which is trying to reduce production to regulate the market.

However, he noted that the decline in production in the United States will lead to the growth of influence of countries outside the alliance, for example, in Latin America. Therefore, it is important for OPEC+ to involve new oil exporters in its activities.
Regarding the resource base of Arab countries, Gromov states that it is adequate to sustain high levels of oil production. Furthermore, flow rates in traditional fields in Saudi Arabia can remain stable for 5-10 years. In contrast, in the shale industry, maximum oil recovery is achieved in the first or second year, after which production declines rapidly without additional investment in drilling.

Gromov concluded that the OPEC+ countries have sufficient oil reserves for many decades, and there is no risk of depletion. It is crucial to maintain investment-attractive prices for oil to invest in new deposits.