Qatar, Algeria, and Ecuador did not produce as much crude oil as outbound shipments in the U.S., according to a Financial Times report. The amount of oil that is exported from the U.S. to other countries went up sharply after a 40-year-crude oil ban was done away with in 2015.
The Financial Times report cites three reasons for the increase in oil outbound shipments from the U.S. For one, companies in the U.S. upped their drilling after oil prices rebounded in 2016. Oil is being produced domestically at a rate of more than 9 million barrels per day, according to an estimate from the U.S. Energy Information Administration (EIA). This has not occurred for ten months. Next, bringing oil to other countries is less expensive due to decreasing supertanker lease rates. In addition, U.S. oil is more affordable than other oil grades due to the excess oil. Finally, oil refineries in the U.S. did not yet remedy the oil excess.
Other OPEC countries, especially Saudi Arabia, usually have the reigns when it comes to unfairly increasing the price of oil. OPEC decided to reduce oil outputs beginning on January 1st, which was a decision it made last November. It has been eight years since OPEC has made such a move. Now, foreign countries are considering getting their oil from the U.S. and other countries.
According to a Reuters report, sources with OPEC and the oil industry said Saudi Arabia would like to see crude oil prices at $60 per barrel in 2017. Saudi Arabia thinks that price would stimulate investments. The country also believes that U.S. shale production would not increase. A report from Rystad Energy consultancy at the beginning of February offers a different outlook. According to the report, shale oil in the U.S. broke even at about $35 a barrel in 2016.