Opec crude oil shipments to the world’s largest economy sank to a thirty-year low as part of an effort by the cartel and its allies to balance supplies and counteract America’s shale boom.
Opec supply cuts that started in 2017 were extended in 2018. The end result was Saudi Arabia cutting exports to the US by 9 per cent to about 870,000 barrels a day in 2018. Opec as a whole sent 17 per cent less than the year before, and the least since 1987, according to the latest US government data.
Rapid production growth in the prolific Permian oil patch also sapped interest among American refiners for Opec’s deliveries. With the help of light oil, US crude production hit a record 12 million barrels a day and is expected to grow more into 2020, based on data from the Energy Information Administration.
An abundance of supply from shale wasn’t only to blame for Opec’s withering exports to the US. Venezuela, the country with the world’s largest crude oil reserves, has been struggling to maintain its production which has reached the lowest levels since 1940s due in a large part to chronic mismanagement of its oil industry.
More recently political unrest and U. S-led sanctions resulted in the Latin American producer sending just sent just half a million barrels a day to US last year, the smallest volume since 1989.