Once the global oil market emerges from the coronavirus crisis, it may be greeted by a surprising change: greater dependence on crude from OPEC.
For the time being, the Organization of Petroleum Exporting Countries and its allies are relinquishing their share of the market in a bid to prop up crude prices, slashing millions of barrels of output as the pandemic crushes fuel demand.
They’d already spent the past three years forsaking sales volumes to offset the oil glut unleashed by burgeoning U.S. shale production. Before the pandemic, forecasters were projecting that the group would need to cut production further in coming years.
Yet the current upheaval could give OPEC another chance. As the oil-price collapse chokes off investment in new supplies around the world, from the mega-projects of Big Oil to drilling by U.S. shale wildcatters, some analysts see the cartel reviving its battered standing.
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