OPEC+ Decisions Boost U.S. Shale Industry

By Olesya Astakhova and Yousef Saba

RAS AL KHAIMAH, United Arab Emirates (Reuters) – Igor Sechin, head of Russia's largest oil producer Rosneft, stated on Thursday that the OPEC+ group's decisions to reduce oil output in 2016 and 2020 have significantly aided the U.S. shale industry, positioning it as a leading global energy exporter.

Speaking at a forum in the UAE, Sechin highlighted Russia and its partners' contributions to stabilizing the global energy market over the past decade. A long-time ally of Russian President Vladimir Putin, he has previously been skeptical about the benefits of Russia's cooperation with OPEC, suggesting the U.S. gained the most from the 2016 agreement.

Sechin remarked, "OPEC+ decisions to stabilize the oil market in 2016 and 2020 significantly supported the US shale industry."

Nevertheless, some analysts believe that OPEC+'s efforts to balance the global oil market have been undermined by slow fuel demand in China, the world’s second-largest oil consumer, and increased output from non-OPEC countries, particularly the U.S.

OPEC+, which includes the Organization of the Petroleum Exporting Countries and its allies such as Russia, collectively produces about half of the world's oil. The group is scheduled to hold an online meeting later today to discuss production policy for 2025 and is expected to extend its current production cuts by at least three months starting January.

U.S. oil production is projected to grow by only 2.3% this year, as shale producers focus on shareholder returns and curb new production spending. In contrast, U.S. oil exports saw a notable increase of 13.5% last year, continuing an upward trend except for 2021 when COVID-19 severely impacted global oil demand.

Data from the U.S. Energy Information Administration reveals that U.S. crude oil production has led worldwide production for the sixth consecutive year, with an unprecedented average production of 12.9 million barrels per day.