The US and other crude producers will take more oil market share from OPEC in the coming years, Bank of America says

• OPEC+ nations will lose market share to non-member states in the coming years, BofA said.
• The OPEC+ decision to delay production increases is unlikely to boost oil prices, the bank said.
• Some coalition members are producing above their quota, adding to OPEC's issues.

OPEC+ countries have agreed to postpone increasing oil production until April, extending a coalition-wide reduction in output.

However, efforts to bolster oil prices are unlikely to pan out, Bank of America said. Instead, limiting supply means that OPEC+ is ceding market share to non-OPEC producers, including the US.

"We expect non-OPEC supply growth to take a ~75% share of the world's global demand growth into 2030. In other words, only ~20% of OPEC+ spare capacity may be called upon this decade," a team of analysts wrote Friday.

The organization, led by Saudi Arabia, has voluntarily reduced oil output since mid-2023 in a bid to boost prices. Despite their efforts, Brent crude, the international benchmark, is down over 12% from its April peak, and the cartel has already delayed an increase in production twice this year.

Lagging oil demand is the chief culprit, BofA said. This "Achilles' heel" is unlikely to improve next year, as oil demand growth is estimated to fall under one million barrels per day in 2025. Lackluster China demand and slowing world growth are chiefly to blame.

At the same time, non-OPEC nations have become a thorn in the coalition's side. US producers have been pumping record amounts of oil, with monthly output hitting records in 2024.

"Whilst we expect some OPEC supply growth next year ~300kb/d, the lion's share will come from non-OPEC producers," BofA said, later adding: "In total, we forecast 1.4mn b/d of growth in 2025 and 800k b/d in 2026, led by the US and supported by substantial growth in the rest of the Americas, including Brazil, Guyana, Argentina, and Canada."

Amplifying the challenges for OPEC+ are internal issues, the bank added. Despite the coalition's commitment to reduce oil output, not all member states have stuck to the policy. As low oil prices have led to rising fiscal budget deficits in OPEC economies, some have produced beyond the agreed quota.

"Perhaps partly as a result, compliance with OPEC quota has already suffered in 2024 - amounting to >0.5mbpd of excess oil production YTD despite combined production dropping since the summer," analysts said.

Still, market share likely matters to these countries. In October, speculation had mounted that OPEC leader Saudi Arabia was planning to unleash a wave of oil supply, in part to regain control of prices and secure its dominant position in the oil trade.