US oil producers face a bad hand and a wildcard

If escalating tensions in the Middle East drive a prolonged period of higher oil prices, that could provide enough of an incentive for US oil producers to sustain the current high level of output for now. That said, US oil output faces growing headwinds from fading productivity gains and a challenging policy backdrop, which could allow OPEC+ to recapture lost market share as they bring more supply to the market.

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