OPEC is “back in the driver’s seat” as the world’s top oil producer as U.S. shale growth slows, Hess (NYSE: HE) CEO John Hess said Thursday.
Hess told a business conference in Miami that he sees US oil reaching ~13M bbl/day in the next few years before falling, as shale output slows due to declining supplies, rising prices and pressure from investors to focus on growth.
“Shale was considered a swing producer … the Saudis and OPEC have been waiting for this. Now, in fact, OPEC is back in the driver’s seat where they are the swing producer,” said Hess, although OPEC has no additional power. easily increase its production.
The CEO expects that US oil will increase by ~500K bbl/day this year and next, but many companies have already “hit the wall” with only ten years left in life.
Hess ( HES ) said the decline in his company’s future will be more than offset by growth in Guyana, where the Exxon-led consortium hopes to triple production to 1.2M bbl/day by 2027.
OPEC agreed last month to cut oil production by a staggering 2M bbl/day, Hess said Thursday, is as much a political challenge for President Biden as it is an economic crisis.