U.S. oil production surged to a record 13.4 million barrels per day in August, complicating OPEC's considerations on resuming supply to the market. The Energy Information Administration (EIA) reported significant contributions from Texas and New Mexico, with Texas hitting a historic high of 5.8 million barrels per day and New Mexico reaching a new 2.1 million barrels per day milestone. Together, these regions form the prolific Permian shale basin.
Although the overall pace of U.S. production growth has slowed, with shale producers prioritizing shareholder returns over increasing output, the trend still influences global markets significantly. Analysts predict a potential supply surplus next year.
Meanwhile, Saudi Arabia, OPEC's largest producer, saw its oil imports drop to 235,000 barrels per day, the lowest since January 2021 during the pandemic-related lockdowns. Despite this, Saudi Aramco's subsidiary, Motiva Enterprises LLC, remains a key buyer for the Port Arthur Refinery in Texas, one of the largest in the U.S.
OPEC and its allies are deliberating whether to resume supply in December, but given the weakening oil prices amid a fragile economic outlook and diminishing geopolitical risk premiums, the decision is complex. OPEC has halted supply adjustments since 2022.
