Since Donald Trump took office, the trade war has led to a dim outlook for global market demand. In contrast, OPEC+, led by Saudi Arabia, has declared another increase in production in July, attempting to leverage pricing strategies against American shale oil producers.

In the program "Fengxiang Longfengpei," analyst Chen Fengxian pointed out that Saudi Arabia's actions, while ostensibly aimed at punishing Kazakhstan for not adhering to production cuts, are actually targeting American shale oil companies in a broader commercial battle. She noted that as the International Energy Agency and OPEC continuously downgrade oil demand forecasts, there is limited growth space for global crude consumption amidst a global trend to gradually reduce fossil fuel reliance.

Shale oil production costs are high, and when prices fall below $50 per barrel, many shale oil producers will face bankruptcy. Saudi Arabia's pricing strategy has been used before during the 2020 pandemic, when global demand collapsed. Back then, Saudi Arabia refused to cut production and initiated a price war that crushed U.S. shale oil operators. Currently, as Trump returns to the White House and eases restrictions on shale oil production, the ongoing production cuts are not only a financial strain for Saudi Arabia but also risk ceding their dominance in the oil market.

Chen highlighted that Trump's return might complicate matters for Saudi Arabia, as the U.S. inflation issue has shifted focus. In the short term, it is hard to expect strong oil price performance, but once Saudi Arabia manages to push out American shale oil operators, a rise in oil prices could follow.