Supply Dynamics Among the Big Three Oil Producers: Russia, Saudi Arabia and the USA

Supply Dynamics Among the Big Three Oil Producers: Russia, Saudi Arabia and the USA

The developments of the past five years have represented a live experiment for the global oil markets on an unprecedented scale. They have tested the stress levels of oil-producing nations with respect to the economically viable cost of production, fiscal breakevens, and elasticity of supply under quickly changing market conditions. A new hierarchy of projects has been introduced shifting the focus to shorter-cycle developments. New market fundamentals are turning former net importers into net exporters and have created a new geography of global petroleum trade. The oil matrix has been reloaded and new winners and losers are emerging. The “big three” global oil producers – the United States, Russia, and Saudi Arabia – who, combined, have been producing over one-third of global oil and have been the key oil market players in the twentieth and twenty-first centuries – are in the middle of this process and their actions are going to be key to the future shape of the global oil market. This report focuses on how new oil market developments have changed the oil industries in these three countries, how their strategies have shifted and what these changes mean.