OPEC+ Concerned About Rising U.S. Oil Output Under Trump’s Leadership
OPEC+ is expressing concerns about a potential surge in U.S. oil production if Donald Trump returns to the White House, delegates from the group said. Increased U.S. output could further erode OPEC+’s market share and hinder its ability to maintain high oil prices, a priority for the producer alliance.
OPEC+ Strategy at Risk
Currently, OPEC+—which accounts for roughly 50% of global oil supply—has delayed plans to raise production until April and extended some supply cuts until the end of 2026 due to weak demand and growing output from non-OPEC+ producers, particularly the U.S. Over the past decade, the U.S. has become the world’s largest oil producer, now accounting for 20% of global oil supply.
The renewed concern comes as Trump’s transition team is reportedly preparing a wide-ranging energy deregulation package, promising a boost to U.S. oil production. While OPEC+ acknowledges that less stringent environmental policies under Trump could be favorable for the global oil industry, the expected rise in American output is seen as a challenge.
One delegate from an OPEC+ member aligned with the U.S. commented, “Trump’s return could be good for the oil industry, but higher U.S. production is not good for us.”
U.S. Oil Output Trends
OPEC’s data indicates that U.S. oil output has risen by 11% between 2022 and 2024, reaching 21.6 million barrels per day (bpd). This surge in production has contributed to OPEC+’s declining market share, which now stands at 48% of global supply, down from over 55% in 2016 when the alliance was formed.
OPEC+ has faced challenges maintaining its influence, especially as U.S. shale oil output has flourished. Decisions to reduce production in 2016 and 2020 inadvertently supported the growth of the U.S. shale industry, turning it into a leading global exporter.
Looking ahead, OPEC+ plans to ease production cuts starting in April 2025. However, any significant rise in U.S. output could risk a drop in oil prices, harming OPEC+ nations heavily reliant on oil revenues.
Industry Dynamics Under Trump
Trump campaigned on promises to lower energy costs and inflation, goals that align with boosting domestic oil production. According to Richard Bronze, head of geopolitics at Energy Aspects, “This is a potentially difficult dynamic for both sides. Rising U.S. production has reduced OPEC+’s influence on the market.”
Still, some industry analysts doubt that Trump’s policies alone could lead to a substantial near-term increase in U.S. output. Shale producers remain focused on profitability, known as capital discipline, and are unlikely to expand production without favorable prices. Moreover, new oilfields take years to develop, meaning Trump’s promises to expedite drilling permits may not immediately translate into higher output.
Bob McNally, president of Rapidan Energy Group, explained, “The U.S. has no spare capacity. How much the U.S. will drill depends more on decisions made in Vienna than in Washington.”
OPEC’s Outlook and Challenges
OPEC’s latest report forecasts U.S. oil supply to grow by 2.3% in 2024, while the International Energy Agency (IEA) predicts a faster growth rate of 3.5%. At the same time, OPEC has lowered its global demand growth forecast, reflecting uncertainties in the market.
Despite these challenges, some OPEC+ delegates see a potential silver lining. A source noted that while rising U.S. production poses risks, Trump’s policies could also boost global oil demand, indirectly benefiting the producer group.
As OPEC+ prepares for a future where U.S. shale continues to expand its market share, the group faces a delicate balance of managing production cuts and maintaining price stability.
