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Declines in Iran, Venezuela to reduce cartel’s output capacity
- Demand for group’s crude stays below pre-cuts level until 2024
OPEC’s loss of market power to what was once its biggest customer will continue until the middle of the next decade as U.S. shale oil thrives.
By 2024, the Organization of Petroleum Exporting Countries’ capacity to pump crude will actually shrink because of declines in Iran and Venezuela, according to the International Energy Agency. As rivals grow, the amount of oil the world needs from the cartel each year won’t recover to pre-2016 levels — before OPEC started cutting production — throughout the period.
The report may be sobering reading for OPEC, which has capped its production for the past two years to stave off a global glut that would depress prices. Although its cutbacks have mostly achieved those aims, they’ve also invigorated the shale-oil boom in the U.S., helping the country become the world’s biggest crude producer.