Record-breaking oil production from the US has left OPEC with its lowest crude market share in nearly a decade

• The IEA said Thursday OPEC's share of the oil market has dropped to 51%, it's lowest since 2016.
• That's thanks to record crude output from the US, Guyana, and Brazil in 2023.

Huge volumes of US oil production, as well as output from Brazil and Guyana, have eaten away at the Organization for Petroleum Exporting Countries and its allies' command of global crude flows, with the energy cartel's market share dropping to its lowest mark in nearly a decade, according to the International Energy Agency.

In its oil report covering data up to December 2023, the IEA said OPEC+'s market share had fallen to 51% in 2023.

It hasn't been that low since the group expanded to include additional allies in 2016, the Paris-based firm said.

"Record-breaking supply from the United States, Brazil and Guyana, and sharply higher Iranian oil production, along with easing demand, prompted some OPEC+ members to announce more extensive 100 2 1Q24 cuts to fend off a potential inventory build," the IEA said.

In a bid to steady crude prices, which have plunged 20% in the last two months, OPEC+ is on track to post a 400,000 barrel-a-day decline for the year.

At the same time, the US is on track to notch a supply increase of 1.4 million barrels a day for the year. American producers have enjoyed improved drilling efficiencies and well productivity in the shale patch, the energy group said.

In September, US supply exceeded 20 million barrels a day, running against industry warnings of a looming economic slowdown.

"Hefty supply cuts, largely shouldered by Saudi Arabia, have been tempered by Iranian production at five-year highs," the IEA said. "While non-OPEC+ supply growth is set to lose momentum in 2024, forecast gains of 1.2 mb/d may yet exceed the increase in global oil demand."

Still, the IEA maintained that a slowdown in crude demand is indeed coming and macroeconomic headwinds are mounting.

The pace of expansion, in their forecast, is set to ease from 2.8 million barrels a day year-over-year in the third quarter to 1.9 million in the fourth quarter.

The IEA lowered its forecast on global oil demand growth for 2023 by 90,000 barrels a day from last month's prediction, to 2.3 million barrels a day.

"The impact of higher interest rates is feeding through to the real economy while petrochemical activity shifts increasingly to China, undermining growth elsewhere," the IEA said. "Europe is particularly soft amid the continent's broad manufacturing and industrial slump. In addition, tighter efficiency standards and an expanding electric vehicle fleet continue to curb oil use."