24 JULY 2025
The chart below helps to explain why the oil price has remained weak, despite the recent Israel/Iran war and the ongoing conflict in Eastern Europe.
Thanks to the growth of its shale industry over the past decade, the US is now (by far) the world’s largest producer of oil.
It currently represents over 20% of total global output, more than double that of any other individual producer, including the historically dominant actors like Saudi Arabia and Russia.
This US dominance significantly reduces the impact of flare-ups in geopolitical “hotspots,” like the Middle East and some other oil-producing regions.
In fact, the surge in US production is the main reason why the oil market is widely regarded as being oversupplied.
This is why Brent crude has posted a significant loss over the past 12 months, despite the recent conflagration in the Gulf.
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