The United States is now the largest producer of Oil in the world. 1) Vast reserves in the Permian Basin. 2) Production and cost efficiencies achieved for fracking. 3) Increased pipeline, storage, and terminal capacity and infrastructure. 4) Vast strategic reserves. And 5) No artificial constraints on production (think OPEC) all point to increasing flow to the global market place.
Russia and OPEC Members can jawbone all they want about not increasing production to make up for Saudi interruption however they will not. No oil producing nation wants to lose market share. Especially when Brazil is aggressively increasing its production capacity and Venezuela is certain to restore its production capabilities sooner rather than later.
U.S. production guarantees supply will meet demand. Fear of losing market share will work to force the price of Oil below $40 a Barrel within the next 15 – 18 months. Note average cost of production per barrel is close to $15 per Barrel (personal estimate) and dropping. At $60 Oil is selling at a 400% premium. $30 would be a 100% premium.
Improving battery efficiencies adding to the range of electric cars and their popularity provide added incentive for producers to pump as much as they can as fast as they can.
Watch how fast Saudi Arabia restores full production capabilities.