The major Western oil companies adhere to their expansion plans to increase production

The major Western oil companies insist on adhering to their expansion plans at the present time, despite the decline in crude prices by 16% during April, and the possibility of increasing the production of “OPEC+” in the coming months.

The “Exxon Mobil”, “Chevron”, “Shell” and “Total Enemz” maintained their investment plans with the announcement of the results of the first quarter this week, while “BP” was the exception, as its spending was reduced under pressure from the hedge fund “Elliot Incontammtement”.

This insistence comes from oil giants at a time when the global market appears saturated with supplies, with prices reaching their lowest levels in four years, amid fears that customs duties will slow the global economy and the decline in energy demand. This came in the wake of a sudden decision last month from OPEC to increase production.

An additional abundance on the market
The market may witness an additional abundance, as some OPEC+countries discuss a new increase of about 400 thousand barrels per day in June, before a virtual meeting held on Saturday to make the decision.

The message of major oil companies contradicts that it is continuing to increase production despite the low prices, with the position of shale oil producers in America, who need a price exceeding $ 60 a barrel to achieve a tie. The price of the West Texas Intermediate crude, the American standard, ended Friday’s trading, low 1.6% at $ 58.29 a barrel. EOG Resources said Thursday that it had already reduced its growth plans for 2025.

President Donald Trump continues to urge local producers to increase production, as part of the “American Energy Hegemony” policy, as well as to curb fuel prices. On Friday, the president boasted about the decrease in gasoline prices as one of the most prominent achievements of the first hundred days of his term.

On Friday, Exxon and Chevron reaffirmed their plans to increase production this year by 7% and 9%, respectively, with expectations of increasing supplies from Kazakhstan, where they participated in the newly expanded “Tingz” project. Kazakhstan had overlooked its share of “OPEC” repeatedly, which sparked Saudi discontent and pushed to adopt an increase in the supply approach to punish the non -committed countries within the organization.

Oil production in Kazakhstan
“The presence of American companies such as Exxon and Chevron in Kazakhstan can play a pivotal role in paying supplies growth. This raises questions about the possibility of using American influence to pressure (OPEC+) to increase the supply,” said Mokish Sarv of Restad Energy in a note on Friday.

Foreign companies manage a large part of Kazakhstan production, and there are no strong indicators on the intention of reducing production there. Mike Worth CEO, Chevron, said that during his meeting with Kazakhstan leaders, he had not discussed the issue of reducing production in the “Tengis” project, which is expected to reach the production of one million barrels per day later this year.

He added: “The barrels that we produce in Tengis are of high value of the Kazakh government, which are important to achieve financial balance, and their production has not been historically reduced.”

On the other hand, EOG has reduced its budget by $ 200 million for this year, and its expectations for oil production were reduced to 2% instead of 3%. The “GB Morgan” analysts considered this step “an early warning” for the rest of the sector.

Other companies specialized in shale oil, such as “Diamond Pak Energy”, “Oxidental Petroleum”, and “Konoko Phillips” will announce their results next week.

Reducing drilling platforms
For its part, Houston -based Houston Services, “Nebers Electriz”, said that the shale oil producers are planning to reduce the number of drilling platforms by 4% by the end of the year, according to a survey of its wage and included about half of the sector.

However, these cuts are unlikely to have an immediate effect on global supplies. Stephen Richardson of Evekor said that the shale oil sector in the United States “indicates modest modifications in response to low prices, in light of the accumulation of worrying global economic indicators.”

In all cases, any efforts from independent companies to reduce shale oil production may be corresponding to an increase in the production of “Exxon” and “Chevron”, which have expanded significantly in recent years, and have become a greater part of the total production. And “Chevron” raised its production by 12% during a year to about one million barrels per day, while “Exxon” aims to produce 1.5 million barrels – an increase of 25% – after its acquisition of the “Pioneer Natersal Reesors” company.

Accordingly, the supply of oil is increasing at a time when the global economy is expected, which will affect demand.

“With this degree of economic uncertainty, it is difficult to imagine a catalyst that may push the demand for oil and gas to rise in the next two quarters. We are likely to settle in a medium -term environment in the short term to the Mediterranean,” said Nick Hamel, an analyst at Edward Jones in Saint -Lewis.