OPEC: Declining US Market Share Trend Continued in 2018

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OPEC saw its market share in North America fall last year. with shipments to the region declining by 12.6% to just over 2.813 million b d as US shale output helped transform the world`s largest consumer of oil into the seventh biggest exporter of crude. according to a report released by the cartel on Monday.

Exports to North America declined by 406.000 b d in 2018 compared with the previous year. while the US experienced the biggest increase in crude output as production surged 17.2% over the same period to almost 11 million b d. the 2019 OPEC Annual Statistical Bulletin showed.

`Italy and the Netherlands are the main purchasers of US crude oil in Western Europe.` said OPEC in the report. `In Asia. China. India. South Korea and Taiwan account for the biggest shares. The overall consequence is that the US has become one of the largest crude oil exporting economies on a global scale.`

The figures highlight the challenge facing OPEC in restricting output to maintain prices at economically acceptable levels without providing an incentive for US drillers to continue boosting production. The Energy Information Administration now forecasts that US oil output will surge to almost 15 million b d by 2027.

OPEC and its allies led by Russia have repeatedly come under pressure from US President Donald Trump to ease their production curbs and damp down oil prices in the wake of sanctions on Iran. However. prices have been hit recently by fears of a widening trade dispute between China and the US hitting global growth.

Brent crude prices have dropped by almost a quarter from their 2018 highs and were trading at $61.37 b on Monday after the US` latest threat of trade tariffs against Mexico and persisting concerns over its worsening economic relationship with China.

OPEC is due to meet in the coming weeks to agree on whether to extend output restrictions of 1.2 million b d despite the risk of supporting US producers by sacrificing more market share. Saudi oil minister Khalid al-Falih told local media on Monday that OPEC remained focused on maintaining `market stability beyond June.`

The group`s total output declined by 1.3% last year. or 415.000 b d. with Asia its largest regional export market. according to the report.