OPEC’s long-term problems… The Economist

Here is The Economist on looking past the recent OPEC+ deal:

”But opec’s decision to trim output points to further uncertainties within the alliance. The first is how long it will be willing to continue losing market share to America. In 2014, as American oil flowed freely, opec declined to curb output, hoping that slumping prices would teach gung-ho American oilmen a lesson. The ensuing crash pained petrostates and wildcatters alike. But shale production has roared back—last year America produced more crude than any other country—and opec has become reluctant to let prices dive again. The result is that opec’s share of global production has dipped, from 42.2% in 2016 to 39.2% in March, and America’s has risen, from 10.9% to 14.5% (see chart)….

But there is a limit to how much further output in Venezuela and Iran can fall. If oil prices remain low, Saudi Arabia and Russia may face an uncomfortable choice: let prices dip or cut production more steeply, thereby losing market share and propping up American shale. This month’s meeting was straightforward. Future ones may be less so.”