An overview of the oil market, OPEC and global recession. (Pics)

This is my view from following the story for sometime now not an expert opinion if have made mistake please point out the ignorance don't let it spread:

USA
Roll back a couple of years,the oil industry is booming a barrel of oil sold over a 100 dollars per barrel and demand was very high then United States develops a new technology to extract oil called fracking. This leads to an oil boom in the United States driving the price of gas/petrol down locally. Previously, the United States had a law preventing oil exportation because of some artificial scarcity influenced by OPEC in the late 70's but this oil boom changed all of that so president Obama signs a bill lifting the ban on oil exportation hence, the USA reduced importation from countries like Nigeria and also became an exporter. The USA has the largest oil reserve, produces about 7million barrels per day (mb/d) and increasing but consumes twice that.

CHINA
The manufacturing company of the world whose economy has being rising progressively for over a decade plus suddenly shows a sign of decline hence, the need for less oil. The USA and China are the largest economies in the world and the largest importers of oil in the world. Together they account for about 40 percent of the global consumption of oil.

IRAN
Since the Iranian revolution of 1979, (Argo ft Ben affleck depicted scenes from that revolution) the United States had being imposing various sanction on Iran. Their uranium enrichment program aimed at developing nuclear arms further worsened matter as the UN even toughen sanctions on them in 2006 which affected their oil supply. Fast forward 2014 president Obama starts negotiating a peace talk with Iran to dismantle their nuclear research in exchange for a lift on sanctions, a deal was reached in January 2016 and Iran started to contribute about 4 mb/d.

RUSSIA
After the Russia Annexation of Crimea in Ukraine, there's being a lot of power play between the west led by USA and the UN against Russia. Various sanctions have being imposed on them since them. Russia being the second largest producer of oil about 10 mb/d behind Saudi Arabia 11 mb/d. The Russian economy is very similar to that of Nigeria being largely dependent on oil. And the purpose of sanctions is basically to hurt the economy so yes, lower price of crude oil is impacting on the Russian Economy.

There are also Syria, Libya, Nigeria and Iraq whose oil production is or was being hit by terrorism who are currently just recovering but those are not major players with the exception of Iraq who produces about 4 mb/d.

LOWER DEMAND
The cases of China and USA the big economies has led to a reduction in the demand for oil. Global warming / climate change and the move to renewable energy is also affecting the global demand for oil. Hence, demand is falling.

EXCESS SUPPLY
With the development of fracking and the entrant of USA as a supplier, countries led by Saudi Arabia have taken steps to protect their market share by effectively increasing their supply of oil which In turn forces the price down and as such, countries producing at higher cost like the USA cannot compete in the market.
Cost of production in the USA is about 50 dollars meanwhile in Saudi Arabia and most middle eastern countries it's about 20 dollars. This tactics coupled with the sanction lifted in Iran, stability in Iraq and Libya have recently pushed the supply of oil from about 25 mb/d in 2010 to presently about 34 mb/d.

OPEC TODAY.
Some hours ago, Russia (300 thousand bpd) and OPEC (1.2mb/d) agreed to cut supply by 1.5 mb/d for 6 months which has caused a rise in the price of oil from about 40dollars to 50 dollars. There's an argument in which artificial scarcity or hoarding as opposed to a system where the free forces of market demand determines the price of a commodity but politics or standard aside, most of these countries need money Nigeria being one and they need that excess profit on oil and that's all that needs to be said about the deal.

FORECAST
There's a possibility that as price rises, the frackers in USA an economy that is least dependent on oil will kickstart production that has being hit by the low prices which has caused many rigs to be shut across the USA. This will eventually knocks off the effect of the OPEC deal on the long term.
Also, relationship between the west (USA/UN)and Russia is yet to improve so lower oil prices and a bad Russian economy is still good news to the west
The currency of the world really is oil, it's all about the big oil industries and the biggest players are Saudi Arabia and Russia. With the incumbent trump administration, ties are likely to change from anti- Russia to pro Russia which in turn will be good news but there's also a possibility of anti-Saudi Arabia which will in turn take us back to square one but these are just speculations, Only time will tell, when this recession will end.
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Cc @lalasticlala , @seun

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