The costs may hit the U.S.in many ways: from the higher cost of steel and aluminium inputs into a wide array of products up to retaliatory measures from countries around the world.
After downplaying and then attacking, Opec has spent the previous year making nice with its USA shale adversaries, in an effort to understand the magnitude of the problem and, perhaps, convince the rival producers to show restraint. And OPEC knows that today's current underinvestment could precipitate a supply gap and higher prices in the coming years. The shale oil production in the United States has been booming over the recent months.
Dr Fatih Birol, Executive Director of the IEA, said: "The US is set to put its stamp on global oil markets for the next five years".
Now that shale oil production is also escalating in new regions like the Permian Basin, which lies under parts of Texas and New Mexico and is expected to double their gas and oil production by 2023. Global demand growth would average only 1.1%. The IEA slashed projections for the amount of crude needed from the group, indicating its supply cuts would need to stay in place until 2021 to avoid creating another prolonged surplus.
Opec has been struggling with United States shale for nearly a decade now. "Upstream investment shows little sign of recovering from its plunge in 2015-2016, which raises concerns about whether adequate supply will be available to offset natural field declines and meet robust demand growth after 2020", it said.
The OPEC and non-OPEC production cut that began at the beginning of past year has worked in the cartel's favor. Venezuela's oil production is already expected to continue to decline -output is expected to average 1.43 million barrels per day (bpd) this year, down from 2.18 million bpd in 2017. The price crash of 2014 forced shale producers to reshape themselves into fitter, leaner and faster players that can thrive with a $50 price regime. "Without Opec there'd be chaos in the market".
24 arrests made at Richard Spencer's visit to MSU
Richard Spencer coined the term "alt-right, ' and popularized the idea of a future state exclusively for white people". Police had blocked off the venue, which is away from the university's main campus, in hopes of avoiding such fighting.
Here's the flip side of the catch-22 situation.
In its annual outlook for world oil markets, the Paris-based agency forecast that the U.S., Canada and Norway will account for virtually all global supply growth over the next five years, and warns of a long-term supply crunch unless investment increases to satisfy growing demand. With forecast capacity of 36.3 million bpd, Opec will be supplying less than 35 per cent of global demand by 2023 compared to its historic share around 40 per cent.
Historically, during many past oil disruptions, OPEC's Arab members like Saudi Arabia and Kuwait have increased exports to prevent oil prices from skyrocketing.
True, few analysts realistically expect oil prices to return to the erstwhile $100-plus levels in the near future.
The IEA forecasts demand of 104.7 million barrels per day in 2023. "With seaborne oil traveling longer distances, energy security, one of the IEA's core missions, will remain as critical as ever".
Russian oil expert Ivan Priobrazhenskiy has commented on the negative outcome of curbing oil production (the OPEC+ deal).