Paul Sankey is an expert in the field of energy and recently predicted that 2024 could begin with an oil war between the United States and Saudi Arabia. According to his analysis, Riyadh would take the first step, boosting its production to flood the market and thus increase supply.
As Sankey indicated in an interview with Business Insider, what Saudi Arabia would be looking for would be a "market share war," that is, the market share that each country represents in this industry.
"You've got to attack the guy that's making the marginal decision to drill or not — and that guy is Mr. Permian Basin," he said, referring to the US shale epicenter.
Currently, the Arab country is producing about 2.5 million barrels per day below its maximum capacity, so the objective for 2024 would be to boost its production, thus causing an increase in supply and a decrease in the price of crude oil.
For Sankey, the move seeks to make it unprofitable for the North American industry to drill for oil, a tactic already used in 2014 and 2020 to regain control over oil prices.
"In all three instances, you've had the biggest problem, arguably, which is that the US is just making highs and new highs and even further highs in terms of its own production," added the expert.
According to the Energy Information Administration, 2023 marked strong crude oil production for the United States, which recently hit a record 13.2 million barrels per day.
Finally, Sankey noted that he has not received information directly from Riyadh about the increase in production, but he hopes the move will materialize next year.
"I think what will happen is they'll wait through winter to see what's going on and maintain, as they've said, into Q1, their cuts. And then if things start to weaken from there, they're going to have to decide what they're going to do," he said.