OPEC+ oil strategy challenges Trump’s domestic drilling agenda

By Al Mayadeen English
Source: News Websites
Today 21:10

OPEC+ moves to undercut US shale production by boosting supply, complicating Donald Trump’s oil strategy ahead of the 2026 midterm elections.

Listen

The sun sets behind an idle pump jack near Karnes City, USA, April 8, 2020 (AP)

A strategic push by OPEC+ to expand oil output is intensifying a global market share contest with the United States, complicating President Donald Trump’s efforts to maintain a balance between low gasoline prices and sustained profits for US shale drillers, analysts told RIA Novosti.

The oil alliance, led by Saudi Arabia and the United Arab Emirates, is adopting an aggressive supply-side approach reminiscent of previous price wars, placing Trump’s oil strategy under pressure ahead of the 2026 US midterm elections.

OPEC+ strategy puts pressure on US oil industry

OPEC+, a coalition of 22 oil-producing countries, has announced two modest production hikes of 137,000 barrels per day (bpd) for October and November. However, the impact is magnified by the return of over 200,000 bpd of previously blocked Kurdish crude, signaling a growing supply glut.

“The OPEC+ strategy will be to drive crude below the $60 per barrel threshold, possibly into the low $50s, to inflict substantial pain on US drillers,” said John Kilduff, a veteran energy market analyst. “US capacity production will be damaged by drillers going bankrupt at those prices.”

The group’s latest moves come as US crude output reached a record 13.642 million bpd in July, a key milestone under Trump’s “drill baby, drill” policy. Yet, this production growth risks triggering the very market dynamics that OPEC+ is now leveraging to suppress competition.

What is the balance?

Trump faces a dual challenge: keeping fuel prices low for American consumers without undermining the profitability of US oil producers. While gasoline prices have fallen from their 2022 peak of $5.02 to an average of $3.13 per gallon, the drop, which Trump has taken credit for, is now a source of concern for the US shale sector.

Kilduff warned that "approving US drilling leases without restraint is actually accelerating OPEC’s price suppression strategy," putting long-term shale viability at risk.

In Texas, a key hub for the US oil sector, industry sentiment has shifted. A recent Dallas Federal Reserve survey showed growing concern among energy executives who believe that crude prices below $60 per barrel are unsustainable.

Producers say that such levels fall "below replacement cost" and make it difficult to hedge production, potentially stalling investment and growth in the US oil patch.

Brent crude, the global benchmark, is currently trading around $65 per barrel. While Middle Eastern producers can profit at $10–15 per barrel, US shale producers require significantly higher prices to break even.

Saudi-UAE oil tactics target US market share

Analysts suggest that OPEC+ will not allow the US to dominate the global export market without resistance. American crude exports reached a record 7.63 million bpd in July, threatening the traditional customer base of Middle East exporters.

"OPEC+ isn't going to roll over and play dead," Kilduff said. “They are going to do their best to unravel American export dominance and wrest back the market share taken from them.”

The competition is further shaped by the personal and business ties between the Trump camp and Gulf leadership. Jared Kushner, Trump’s son-in-law, has received a $2 billion investment from Saudi Arabia’s Public Investment Fund, while Donald Trump Jr.’s cryptocurrency firm also secured a $2 billion investment from a UAE-backed fund.

Political and business ties influence oil dynamics

In addition to investment flows, Trump’s business dealings with Gulf-based firms such as DarGlobal, a Saudi real estate developer, highlight the complexity of the US-Gulf relationship in shaping oil policy.

Despite OPEC+’s assertive moves, some analysts believe prices will remain within a stable band.

“Oil prices have been locked in the most extended trading range since the 1990s, holding between $60 and $65 per barrel for over a year,” said Phil Flynn of Price Futures Group. “This is a sweet spot where Middle Eastern producers make money, but US shale remains constrained.”

Flynn added that this may ultimately serve Trump’s political goals without fully derailing US oil production, suggesting that despite dissatisfaction among drillers, they are unlikely to abandon their political support for Trump in the 2026 elections.