As the mother of commodities and the “blood of industry”, oil prices have skyrocketed, and most economies around the world cannot stand it. Recently, international oil prices have ushered in a new round of surge.
Although the emergence of Omicron this time, the international oil price once hit a big hole – the price plummeted by nearly 13% in a single day. However, shortly thereafter, international oil prices turned upward again, hitting multi-year highs. As of the 20th, the price of Brent crude oil has soared by nearly 23% in the past month, while U.S. WTI crude oil has soared by nearly 25%.
Regarding this situation, high-inflation countries, led by the United States, are also currently having a headache. Why? Because oil can be said to be related to all aspects of our clothing, food, housing and transportation, and with the rapid increase in oil prices, everyone’s cost of living will also rise significantly. What’s more, the United States is still a big car country, so when oil prices rise, inflation will definitely rise.
In order to keep oil prices down, the United States has also spent a lot of effort. The preferred method is to put pressure on OPEC+ to increase production. However, even though the current oil price has nearly doubled compared with the beginning of last year, OPEC+ refuses to increase production at all. The reason given by the organization is that if production is increased rashly, overcapacity may occur in the future.
However, although OPEC+ not increasing production can push up oil prices and allow member states to gain more profits from oil exports, is there no risk in doing so? If only OPEC+ can produce oil in the world, there will naturally be no risk. The problem is, that’s not the case.
At present, due to OPEC+’s unwillingness to increase production, the organization’s market share in India has been “eroded” by other countries. The latest news shows that industry insiders said that although India’s annual crude oil imports have increased, the proportion of oil from OPEC has dropped to the lowest level in 13 years.
Looking at specific data, India’s oil imports increased by 3.9% year-on-year last year, reaching 4.2 million barrels per day, but they have returned to pre-epidemic levels. Among them, the proportion of oil from OPEC dropped to 70%. A friend wants to ask, is this ratio quite high?
It’s quite high, if you don’t tell you that OPEC oil once accounted for as much as 87% of India’s imported oil. In 2008, OPEC’s oil market share in India reached its peak and is now down to 70%. In fact, it has plummeted by nearly 20%.
So, which countries are seizing this market? Foreign media data shows that the United States and Canada may be OPEC’s biggest competitors in this market. Among them, the United States’ oil exports to India accounted for 7.3% of India’s imports, while Canada’s share was 2.7%.
Compared with OPEC’s share, this proportion seems not worth mentioning. However, you must know that the market shares of US and Canadian oil in India reached 5.5% and 0.7% respectively in the same period last year. Therefore, the current market share has actually reached an all-time high.
If OPEC+ is reluctant to increase production, it may indeed be able to draw blood from the global economy with the help of high oil prices, but it does not rule out the possibility of a substantial increase in U.S. shale oil production and competition with the organization for the global market. If the United States, Canada and other countries continue to seize the OPEC+ market globally, there is no guarantee that OPEC+ will not relent on increasing production.
Finally, do you think it is a good thing for the United States and Canada to capture more of the global oil market?
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