Saudi Arabia will emerge as the top global player in the oil market by 2025

Saudi Arabia’s oil market share will reach its highest since the 1980s in this decade, says a report from J.P.Morgan. The exponential decrease in the investments for oil production is a contributing factor to this.

“Saudi Arabia will come out on top in the fight for market share as non-OPEC and US production fades,” JP Morgan analyst Christyan Malek said in a report on the oil industry. The report suggests that “Saudi Arabia will see a large increase in its share of the international oil market as the American shale industry weakens and production declines from outside the Organization of Petroleum Exporting Countries (OPEC).”

Saudi has been leading the efforts to rebalance the price of oil in the market since the decline in demand due to the pandemic. The Kingdom’s market share is expected to rise to reach 15% by 2025. Currently, it is 11.6%.

There has been a drop of 40% in the prices till now with oil prices reaching a record low of $16 dollars per barrel in April. The measures implemented by the OPEC nations to cope with the dropping prices including cutting productions has played out well for them and it has slowly recovered to reach $40 per barrel.

“Through our commitment to a proactive policy, within a cohesive and collective framework, we are restoring confidence to global oil markets. We have grounds to be optimistic about the future.”
Prince Abdul Aziz bin Salman
Energy Minister – Saudi Arabia

A sharp increase in demand is expected in the second half of the year. 91 million barrels of oil will be the daily average requirement. But the pre-pandemic average requirement of 100 million barrels can be reached only by November next year, predicts JP Morgan.

The lack of investments and closing of some fields will open up the opportunity for Saudi Arabia, with its highest capacity and low production rate, to emerge as the top player.

The drop in the U.S shale production will also be an added advantage.  The shale production which showed great growth in 2010 will barely increase this year. It will climb only to 11 million bpd by 2030 from 10.9 million this year, predicts the bank.