Once an American foe, now a friend: OPEC turns 60

Trump has regularly called for lower gasoline prices to help U.S. consumers.

And when prices got too low for U.S. drilling companies to make money this year, OPEC hashed out a deal to bring them back up slightly, in an agreement spurred on by Washington's threat to reduce its military backing for Riyadh, sources have told Reuters. https://reut.rs/3m4gBSr

"Trump orders from Saudi Arabia what he needs for the oil price - and he is served," Chakib Khelil, who was Algeria's oil minister for a decade and OPEC's president in 2001 and 2008, told Reuters. "So indeed OPEC has changed."

The Saudi Energy Ministry declined to comment.

The White House declined to comment. Reuters spoke to eight current and former OPEC officials, representing over a third of the group's output, as well as analysts, traders and investors to ask how U.S. sanctions on Iran and Venezuela had affected Saudi Arabia's influence within OPEC, and whether that had changed the dynamic with Washington.

An OPEC official at the group's Vienna headquarters declined to comment, saying Reuters should ask member states. Oil and other government officials in Iran and Venezuela did not immediately respond to requests for comment.

U.S. OUTPUT SOARS

Saudi Arabia has been the leading OPEC producer for decades, giving it the biggest sway over policy, but the sidelining of Iran and Venezuela has only increased its influence.

Iran's share of OPEC output has nearly halved to 7.5% since 2010 while Venezuela's has collapsed to 2.3% from almost 10%, according to Reuters calculations based on OPEC data. Saudi Arabia's share, meanwhile, has risen 7 percentage points to 35%.

Iran and Venezuela, which founded OPEC along with Iraq, Kuwait and Saudi Arabia, had routinely opposed any moves to bring oil prices down in the face of U.S. pressure.

The increased dominance of Saudi Arabia within OPEC has also come at a time of higher U.S. oil and gas production, which has turned the United States into the world's biggest petroleum producer and slashed its dependence on foreign fuel.

U.S. production more than doubled in a decade to reach over 12 million barrels a day in 2019, according to the Energy Information Administration, as improved drilling technology made previously untapped basins accessible.

OPEC figures show the U.S. share of the global oil market has doubled since 2010, while OPEC's has fallen.

OPEC teamed up with Russia and nine other oil producers in 2016 to form a group known as OPEC+ to boost their collective leverage but a senior Trump administration official said even the new group's influence had waned as U.S. output soared.

'OPEC IS AT IT AGAIN'

Trump has engaged more actively with OPEC than his predecessors, often taking to Twitter to comment on production decisions and oil price moves.

Trump has also developed a close relationship with Saudi Arabia's de facto ruler, Mohammed bin Salman, or "MbS", who relies on the United States for weapons and protection against regional rivals such as Iran.