OPEC’s aggressive strategy of flooding world markets with an abundance of oil appears to be meeting its target goals of deflating competition from other producers. Primarily concerned about what was a booming shale oil market, OPEC’s strategy has impacted all oil producers in a multitude of sectors. Success is giving OPEC the incentive to continue to squeeze producers working in the Caspian, Arctic and Brazilian waters, and shale oil is definitely showing the results in America, where it accounts for as much as 45% of total spending cuts. Large companies have announced significant reductions in capital spending and delays in new projects. Total, for instance, is delaying projects in Norway, Italy and Australia by two years, and over that period of time has projected a reduction in expenditure of $3 billion per year — in order to stabilize revenue and ensure dividends are paid. OPEC is willing to pay the price to see its strategy succeed, even if oil prices reach $20 per barrel.

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