OPEC+ Jittery: Trump’s Return Could Unleash US Oil Flood
The OPEC+ alliance,responsible for roughly half the world’s oil production,is reportedly worried about a potential surge in US oil output if donald trump returns to the White House. This concern stems from the belief that increased American production would significantly erode OPEC+’s market share and undermine efforts to maintain oil prices.
Earlier this month, OPEC+, which includes the Organization of the Petroleum Exporting Countries (OPEC) and independent producers like Russia, delayed a planned production increase until April. Further cuts were extended to the end of 2026, citing weak demand and rising production from the US and other non-OPEC+ nations.
OPEC has a history of underestimating the growth of US shale oil production. This past underestimation contributed to the US becoming the world’s largest oil producer, currently supplying around one-fifth of global oil.
However, some OPEC+ representatives are now openly linking the potential for increased US production to a Trump presidency.They point to his past focus on economic growth and lowering the cost of living, which led to policies aimed at deregulating the energy sector.
“I think that Trump’s return is good news for the oil sector, with the possibility of less stringent policies regarding the habitat… But we may see an increase in US production, which is not good for us.”
This quote, from a representative of a US-allied OPEC+ nation, highlights the delicate balance OPEC+ faces. While less stringent environmental regulations could boost the oil sector, the resulting increase in US production poses a direct threat to their market dominance.
OPEC has yet to officially comment on these concerns. The potential impact on the global energy market and the US economy remains a importent point of discussion among analysts.
The situation underscores the complex interplay between global politics, energy policy, and market forces. The potential for a significant shift in the global oil landscape under a second Trump governance is a key factor for OPEC+ to consider as it navigates the challenges of the coming years.
OPEC+ Fears Trump Return: An Interview with Dr. Michael Jenkins
The potential return of Donald Trump to the White House has sparked concerns within OPEC+, the influential group of oil-producing nations. As reported earlier this year, OPEC+ fears Trump’s policies could unleash a flood of US oil, threatening their market dominance. To dissect these implications,we spoke with Dr.Michael Jenkins, a leading energy analyst and Senior Fellow at the Atlantic Council.
Senior Editor, World-Today-News.com: Dr. Jenkins, OPEC+ has publicly voiced concerns about a potential surge in US oil production should Donald Trump be elected president again. How valid are these fears?
Dr. Michael Jenkins: Their concerns are certainly understandable. During Trump’s previous presidency, his administration implemented policies that considerably boosted US shale oil production. The deregulation of the energy sector along with a focus on “energy independence” led to a significant increase in American oil output, firmly establishing the US as the world’s largest producer.
If Trump were to take office again, it’s highly likely he’d implement similar policies, possibly leading to another surge in US production. This would pose a direct challenge to OPEC+’s market share and their ability to manage oil prices.
Senior Editor: OPEC+ has a history of underestimating the growth of US shale oil production. Could they be repeating the same mistake?
Dr. Michael Jenkins: It’s certainly possible. OPEC+ has often underestimated the resilience and adaptability of the US shale industry. Technological advancements have significantly lowered the cost of shale oil production, making it more competitive globally.
Moreover, the geopolitical landscape has shifted, and the US has become more energy-independent. This puts OPEC+ in a more vulnerable position. If they miscalculate the potential impact of a Trump presidency on US production, they could face notable losses in market share and revenue.
Senior Editor: what steps could OPEC+ take to mitigate these risks?
Dr. Michael Jenkins: OPEC+ will likely need to carefully monitor US production trends and adjust their own output levels accordingly. They might consider further production cuts or negotiate with other oil-producing nations to ensure a stable oil market.
However, they also need to recognize that the global energy landscape is evolving rapidly. The rise of renewable energy sources and growing concerns about climate change are posing long-term challenges to the oil industry as a whole
The potential return of Donald trump to the White House has injected uncertainty into the global oil market. As OPEC+ grapples with the potential ramifications of a revived US shale boom, the coming years will be crucial for the association’s ability to maintain its market dominance and adapt to a changing energy landscape.