Global oil production remains strong even as some leading industry forecasts suggest that global economic conditions will override low global oil prices to constrain oil demand growth this year.
- Some leading OPEC producers, including Iraq, Kuwait, and Saudi Arabia, are producing at or near record levels, largely offsetting production declines from several OPEC and non-OPEC producers. Many of these OPEC members have relatively low operating costs or are on the upside of years of development to bring online new production and thus may not reduce production in the face of the oil price slump to retain their market shares.
- In contrast, other major producers, such as Mexico, Nigeria, the United States, and Venezuela, are seeing global oil prices fall below their break-even prices. These producers are working to reign in production costs, manage declining production in major producing fields, and/or expedite rationalization of their domestic industry, spurred by the boom-bust cycle of the market, under investment, and internal regulatory reforms.