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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).

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