The growth of U.S. crude oil exports has rightly garnered a lot of attention over the past few years as the country increases its share of the global market. However, OPEC will also retain its role as the marginal swing producer to 2040, according to a recent report from Wood Mackenzie.
The report, “Macro Oils Long-Term Outlook H1 2018,” says that while production out of the U.S. will be the key driver of global oil supply growth into the mid-2020s, OPEC will play an important role in the long-term balancing of the market.
Non-OPEC crude production has been very important to the global market since crude prices began to sharply decline in 2014, which resulted in upstream investment dropping by nearly 50%. Forecasts originally expected tighter supplies until 2020, but that has not been the case as production from non-OPEC countries has remained flat with improvements in efficiencies. It is also expected to remain flat until 2030 thanks to long decline rates.