Financial Union News on November 6th (Editor: Zhao Hao) Media analysis suggests that whether it is Trump or Harris who takes office in this election, or whether the Republican or Democratic Party controls congress, US large oil companies will open their drilling valves to compete with other countries for global oil production market share.

Trump has vowed multiple times at campaign rallies to abolish key regulatory measures by the Biden administration and increase fossil fuel production. Trump has also stated that if he returns to the White House, he will reduce US energy prices by half within 12 months by drilling and producing more energy in the USA.

Despite the Democratic Party's consistent stance on opposing shale gas extraction with green and eco-friendly policies to tackle climate change, Harris mentioned during a TV debate that she would not ban hydraulic fracturing. In fact, data shows that US oil production reached record levels during the Biden administration.

Previous reports revealed that individuals familiar with Saudi thinking disclosed that Saudi Arabia will abandon the $100 per barrel oil price target and focus on increasing oil production in December this year. They explained that Saudi Arabia has decided not to hand over market share to other oil-producing countries anymore.

Analysts suggest that Saudi Arabia is planning to challenge the US crude oil industry by using its lower extraction costs to force US oil & gas companies to reduce or halt production, thereby restoring market supply-demand balance. In 2014, Saudi Arabia began boosting production massively, but unexpectedly, shale oil survived by borrowing, and even thrived.

Subsequently, Saudi Arabia had to persuade Russia to implement production cuts together. At the end of 2016, just before Trump's first term, the alliance of OPEC member countries and non-OPEC oil-producing countries like Russia established a larger organization called 'OPEC+.'

However, if OPEC+ initiates another market share battle, their adversaries may no longer be a group of US drilling companies surviving on debt, but the world's largest and financially strongest multinational energy giants.

Data shows that, driven by a series of mergers and acquisitions and concentrated capital expenditure, Exxon Mobil, Chevron, and ConocoPhillips collectively produce 3.1 million barrels of oil equivalent per day from the Permian Basin, a number that continues to grow at a fast pace.

Last week, these three energy giants successively announced their quarterly performance. Chevron stated that its Permian production in the third quarter was 22% higher than the same period last year; Exxon Mobil mentioned that its $60 billion acquisition of Pioneer Natural Resources could save 'quite high' costs, while ConocoPhillips also predicts further growth for the company in the next decade.

Under the combined influence of these factors, the United States' production reached a record-breaking 13.5 million barrels per day last month, exceeding the total production of the two largest OPEC member countries - Saudi Arabia and Iraq.

Just hours after the US energy giants reported their performances, the OPEC Secretariat released a statement, stating that eight OPEC+ member countries have agreed to extend the voluntary production cut of 2.2 million barrels per day for one more month until the end of December 2024.

Analysts believe that due to the growing strength of US competitors, OPEC+ may not be able to gain an advantage in future potential market share battles. They will need to endure longer periods of supply shocks and financial pain, as even Saudi Arabia and Russia cannot bear the consequences of a steep drop in oil prices.

Editor/ping