Crude oil prices are down 40 percent in recent months. There’s a surplus of two million barrels being pumped each day. Estimates are that demand for oil will fall in 2015.
And yet in the face of all this, the Organization of the Petroleum Exporting Countries (OPEC) is holding its oil production steady. So far, the 12 OPEC countries appear willing to absorb huge losses in the hope that plummeting prices will make U.S. shale oil extraction unprofitable. If it can squeeze out some U.S. producers, OPEC hopes to regain its dominance and force the United States back into foreign oil dependence.
The United States has an effective potential countermove:
Congress should lift the 40-year ban on exporting crude oil and keep U.S. producers in the game.
OPEC has good reason to feel threatened. The U.S oil business is experiencing an unprecedented production boom thanks to hydraulic fracturing, or fracking. According to the Energy Information Administration (EIA), U.S. oil production has risen to 9.08 million barrels a day – its highest level in more than 30 years.