Who’s Really in Charge of the Oil Market?

Imagine this: For many years, Saudi Arabia was the nation that the world turned to when oil prices faltered. Saudi Arabia was referred to as the world's "swing producer" due to its enormous oil reserves and ability to increase output almost anytime it pleased.

But everything changed in 2014.

The Day Saudi Arabia Let Go

That year, Saudi Arabia shocked the world during a crucial OPEC gathering in Vienna. They recommended "let the market decide" rather than reducing oil output to drive prices back up.

To put it another way, they abandoned their long-standing responsibility to keep oil prices stable.

Why?

Losing market share was something Saudi Arabia wanted to avoid. Reducing output would have allowed more costly, younger oil producers, such as American shale oil firms, to quickly steal their clients. Therefore, they chose to weather the storm and continue pumping rather than give others an opportunity to develop.

With this audacious initiative, the United States—an unexpected player—became responsible for producing the world's swing.

The Rise of American Shale

The United States was importing more oil than ever before a few years ago. Its oil output, which peaked in the 1970s, had drastically decreased. Then a silent revolution took place.

American producers were able to access shale oil, which is oil that is trapped deep inside rock formations, by combining horizontal drilling and hydraulic fracturing, or fracking. The outcomes were explosive—in the finest sense of the word. The United States' oil production increased by 80% between 2008 and 2014, adding more than 4 million barrels per day, which is higher than the combined output of almost all OPEC members save Saudi Arabia.

The US economy was altered by this boom, not simply the oil markets. The US regained its position as a major energy actor, billions of dollars in investments flowed in, and thousands of jobs were created.

The Tug of War Begins

However, the oil markets are never quiet for very long.

Global consumption started to decline by the middle of 2014. China, the oil-hungry superpower of the globe, began to slow down. In the meantime, nations like Libya increased their output, bringing even more oil to the market. Prices started to decline quickly.

Oil had fallen to less than $50 per barrel by the beginning of 2015. Some people were unhappy about this, but Saudi Arabia refused to back down. Because of its substantial financial reserves, it could afford to wait. Others, however, weren't that fortunate:

●       Russia, already burdened with international sanctions, was hit hard.

●       Venezuela faced economic chaos.

●       Nigeria, Africa’s largest economy, saw government revenues plummet (since oil made up 75% of the economy).

Meanwhile, US shale companies found themselves in a bind. Most needed oil prices around $65 per barrel to turn a profit. With prices dipping below that, production growth began to stall.

Fast-Forward to 2025: A New Set of Challenges

The oil story today is more complex than ever.

●       Oil demand is still growing, but slower than before—about 730,000 barrels per day in 2025, with even less expected in 2026.

●       Trade tensions, especially between major economies, are making markets jittery. Tariffs and economic uncertainty are dragging prices down.

●       Brent crude (a global oil benchmark) recently dipped below $60 per barrel—its lowest in over four years.

●       Some OPEC+ countries, like Kazakhstan, are producing well above their targets, flooding the market even more.

At the same time, countries like Brazil, Guyana, and Canada are stepping up with new production. And even though US shale growth is slowing, these new players are filling the gap.

So, who's in control now?

In actuality, no one nation is in control anymore.

Even while it still has enormous riches, Saudi Arabia is no longer the same. Despite being a big producer today, the US isn't always able to take immediate action. A congested and uncertain oil market is the result of adding emerging nations like Brazil and geopolitical hiccups.

The need for oil may continue to decline as the globe transitions to greener energy sources and electric cars. However, for the time being, the tug-of-war is still going on, with prices fluctuating due to a cacophonous chorus of supply, demand, politics, and international commerce rather than the whim of a single country.

Final Thought

Oil might be just a liquid, but it’s the lifeblood of economies, politics, and even diplomacy. And in this high-stakes game, staying flexible—and informed—is the only way to survive.