Oil prices are higher in part to a pact made between Russia and OPEC (the Organization of the Petroleum Exporting Countries), which cut oil output by 1.8 million barrels per day (bpd). But to counter that, President Trump increased U.S. oil output, making it harder for Russian, Nigerian and other countries’ oil in Europe.
“As OPEC’s efforts to balance the oil market bear fruit, U.S. producers are reaping the benefits – and flooding Europe with a record amount of crude,” Reuters reports.
Republican Senator Ted Cruz points out what Reuters’ calls Trump’s revenge: U.S. oil output is expected to hit 10.7 million bpd this year, rivaling the output of Russia and Saudi Arabia.
For decades Russia has leveraged oil and gas supplies to advance their interests and to bludgeon Europe. American energy is breaking Russia’s coercive power over our European allies. –> https://t.co/FrTWiYOhcA
— Senator Ted Cruz (@SenTedCruz) April 24, 2018
“U.S. oil is on offer everywhere,” a trader with a Mediterranean refiner told Reuters, who regularly buys Russian and Caspian Sea crude and has recently started purchasing U.S. oil. “It puts local grades under a lot of pressure.”
This month, U.S. supplies to Europe are reaching an all-time high of roughly 550,000 bpd (around 2.2 million tonnes), according to a trade flow monitor prepared by Thomson Reuters Eikon.
From January to April U.S. oil supplies increased four-fold year-on-year to 6.8 million tonnes, or 68 large Aframax tankers, based on the same data– and this is costing OPEC and Russia.
Trumps’ plan is helping U.S. oil suppliers, which he hopes offsets what he has described as OPEC “artificially” boosting oil prices. Trump tweeted:
“Looks like OPEC is at it again. With record amounts of Oil all over the place, including the fully loaded ships at sea. Oil prices are artificially Very High! No good and will not be accepted!”
U.S. oil is primarily being purchased in the U.K., Italy, and the Netherlands, primarily being imported by BP, Exxon Mobil, and Valero.