Thanks to U.S. shale oil output, the Organization of Petroleum Exporting Countries’ share of the global crude market has hit a low not seen for over a decade, reports Bloomberg News.
The organization’s global oil market share in 2014 dropped to 41.8 percent, down from 43.3 percent seen the year prior, according to OPEC’s Annual Statistical Bulletin. The downward slide is the lowest crude market share OPEC has seen since 2003. Of the total output reduction, Libya was responsible for over half.
Production growth in U.S. shale oil fields resulted in OPEC ditching its long-held position of balancing world market prices last November. Rather, following Saudi Arabia’s lead, the group opted to maintain output levels, placing pressure on companies with high operating costs to cut production levels as the global supply glut grew. Last year the group’s 12 member countries combined produced 30.68 million barrels per day. Saxo Bank A/S analyst Ole Sloth Hansen told Bloomberg, “The OPEC policy is probably the only option they have. U.S. shale is now the swing producer.”
Last year, OPEC members completed the most wells since 2008, and the increase from 2013 was the largest in 10 years in terms of percentage. But fighting in Libya, between the state government and an Islamist-backed regime, drastically reduced the nation’s output and consequently, overall OPEC output. Due to the persisting conflict Lybia’s production dropped 52 percent, down to 480,000 barrels per day, causing oil revenue to decline 66 percent from the previous year.
According to the OPEC bulletin, OPEC members’ combined sales last year tallied in at $964.64 billion, a 13 percent decline. The group’s exports to Asia also declined last year by 541,000 barrels per day and shipments to North America dropped by 312,000 barrels a day. Iranian crude sales to Europe and Asia also declined due to international sanctions, dropping by 8.7 percent. To read OPEC’s Annual Statistical Bulletin,Z
