Declining OPEC Leverage Predicted in BP Forecast
Growing energy production and diversification in the United States could make the US 99% energy sufficient by 2030, decreasing OPEC’s leverage over oil prices.
The OPEC oil cartel is facing major challenges over the next decade or more because of rising energy production and flat consumption growth in the United States.
According to new projections by BP, the United States will be 99% energy self-sufficient in 2030, due in part to big increases in production of shale oil, natural gas and renewables. These increases will leave the 12-nation cartel saddled with spare capacity, especially in the next decade, that will put downward pressure on prices and reduce incomes for countries dealing with restive, youthful populations.
“We have similar projections,” Paul Tossetti, a senior director in charge of oil markets at PFC Energy, a leading energy analysis and consulting company, told Al-Monitor. “We see OPEC spare capacity starting to increase in the next year or two: 2015 to 2022 will be kind of difficult. Who’s going to cut back production?”
Tossetti said the onus would fall largely on Saudi Arabia and to a lesser extent, the United Arab Emirates and Kuwait, which he described as more disciplined than other members of the cartel.
