OPEC's market influence is expected to grow, but the 12-member group might not return to its pre-recession glory, the International Energy Agency said Tuesday.
The Organization of Petroleum Exporting Countries said in its February market report demand for its crude oil should increase as low oil prices put downward pressure on production in U.S. shale basins.
OPEC in late November opted to keep production levels static to protect a market share influenced by rising U.S. oil production. The 12-member group still holds considerable influence over the global market, but IEA Executive Director Maria van der Hoeven said its status is waning.
"OPEC's share of global production will indeed grow," she said in a statement. "But it will not revisit the higher levels reached before the financial crisis of 2008-09."
U.S. oil production began its precipitous rise in the middle of the last decade as oil prices rose sharply ahead of the global recession.
Among OPEC producers, Iraq was the largest contributor to growth last year, producing a record-setting 3.7 million barrels of oil per day in December. Van der Hoeven said that showed how resilient production was in the region. Iran, she added, could add more oil to the market if nuclear negotiations are successful, but OPEC's influence faces pressure from outside the Middle East.
The economies of Venezuela and Nigeria are under substantial pressure from low oil prices, she said. For Libya, ongoing civil strife has left the once-major North African producer largely on the sidelines of OPEC.
"The overwhelming majority of OPEC production growth is at significant risk, depending on political instability," van der Hoeven said.
