But before that, we didn’t see much actual loss in Russian oil exports, rather, we saw more convoluted ways of getting those barrels to market. That’s an important point when considering potential sanctions relief: the additional barrels coming back into circulation may not be as substantial in volume as some expect. For OPEC+, the key question is whether an additional 500, 000 b/d from Russia will be reintroduced to the market. There’s also the issue of Iran and its sanctions. OPEC+ members don’t want to make it easy for the US to exert pressure on one of their own, even a smaller player like Iran.
Outlook for US oil production?
When Trump came into office, the assumption was that rolling back regulations disliked by the oil and gas industry, such as cutting environmental reviews and speeding up approvals, would trigger a "drill, baby, drill" response. However, price dynamics remain the key driver. We’re still seeing staffing cuts among some major oil companies, and while costs are decreasing and efficiencies are improving, drilling statistics suggest only modest increases in production rather than any substantial jump. Where I think we’ll see more US fossil fuel growth over the next few years is on the natural gas side, particularly natural gas liquids. Over the next few months, the Trump administration will need to provide clarity on which projects, both domestic and foreign, will be approved. Until then, I expect the US oil industry to remain cautious.