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Expand chart
Reproduced from an IEA chart; Chart: Axios Visuals

OPEC is lowering its production to levels not seen in years to balance a global oil market rocked by geopolitics from all sides.

Driving the news: The above chart, from an International Energy Agency report released this week (and h/t to Bloomberg's Javier Blas for highlighting it), shows how this year is an outlier compared to previous years when it comes to oil production from the Organization of Petroleum Exporting Countries.

The big picture: America is now the world's largest oil producer in the world, and that's making it harder for OPEC to balance the market, according to Bob McNally, president of consultancy Rapidan Energy Group.

  • Still, he said, the chart should be read not as OPEC getting pushed out by American oil, but instead the sheer volatility in the market:
"The oil market has rarely seen so much two way risk. China, trade and macroeconomic weakness could send crude prices at least $15 lower and intensifying geopolitical disruption risks in the Middle East and Venezuela could propel them higher by a similar amount."

Where things stand:

  • Oil prices have been relatively stable so far this year, in the $60-$70 range per barrel, for both Brent in Europe and WTI in the U.S.
  • OPEC's share of global oil production has generally hovered between 36% where it is today and 41%, which is where it was in 2008, according to IEA data.

What's next? OPEC and Russian officials are meeting Sunday in Saudi Arabia to discuss geopolitical risks including the attacks this week on Saudi oil infrastructure and the oil market ahead of a meeting in late June when production quotas expire, per S&P Global Platts.

What we're watching: Sarah Ladislaw, an expert at the Center for Strategic and International Studies, tells Axios...

"I expect they will talk about inventory levels and send signals that the markets are well supplied but they stand ready to put more supply on the market if they see a need."
"The question is what kind of messaging comes out about recent attacks on oil-related infrastructure in the region."

Meanwhile, a Saudi-led coalition conducted air strikes in Yemen on Thursday in response to the attacks earlier this week, Oil Price reports.

Go deeper ... The mystery of Trump's OPEC call about gas prices

Editor's note: The chart was corrected to show the measurements are in million barrels/day (not thousand).

Go deeper

Updated 3 hours ago - World

North Korea claims latest missile test new weapon launched from submarine

North Korean state media claims the country's military fired this missile on Tuesday. Photo: Korean Central News Agency

North Korean state media announced that a detected ballistic missile launch off its east coast on Tuesday was a newly developed weapon test-fired from a submarine.

Why it matters: Pyongyang's latest in a series of recent missile launches into the sea happened hours after U.S. officials emphasized their commitment to restart negotiations on North Korea's nuclear weapons program, which have stalled since talks broke down during the Trump administration, AP notes.

5 hours ago - Politics & Policy

Manchin's massive means test

Illustration: Aïda Amer/Axios

Sen. Joe Manchin (D-W.Va.) is offering progressives a trade: He'll vote for their cherished social programs if they accept strict income caps for the recipients, people familiar with the matter tell Axios.

Why it matters: Manchin’s plan to use so-called means-testing for everything from paid family medical leave to elder and disabled care would drastically shrink the size and scope of the programs. It also would bring a key moderate vote to the progressive cause.

The China whisperer

Nick Burns. Photo: Chen Mengtong/China News Service via Getty Images

President Biden's nominee for ambassador to China will face aggressive questioning Wednesday about the most important, and potentially perilous, bilateral relationship in the world.

Why it matters: While Nick Burns is an experienced diplomat with support on both sides of the aisle, lawmakers want to use his confirmation hearing to force the administration into some tough positions on China.