As the world economy continues to recover from the pandemic, demand for oil has been on the rise, leading to a surge in oil prices. However, experts warn that the United States is unlikely to be the “swing supplier” it once was, as a result of the ongoing production cuts from the Organization of the Petroleum Exporting Countries (OPEC) and its allies.
The OPEC+ production agreement, which has been in place since 2016, has helped to stabilize global oil prices by reducing supply in response to weak demand. Despite initial opposition from the United States and other non-OPEC members, the agreement has proved to be highly effective in preventing a glut of oil on the market and supporting prices.
However, as the global economy continues to recover and demand for oil increases, some analysts have questioned whether the OPEC+ cuts will be able to continue to effectively balance supply and demand. In particular, there are concerns that the United States, which has emerged as a major oil producer in recent years thanks to the shale revolution, may step in to fill the gap, effectively becoming the “swing supplier” that can balance the market.