Jim Cramer: It’s possible we’ve reached peak oil output in the U.S.

Jim Cramer: It’s possible we’ve reached peak oil output in the U.S.

[Applause] will there really be a staggering surplus of oil by the end of the decade in this world as the International Energy agency said yesterday now this organization does pretty rigorous work and they say that we’ll have 8 million barrels per day of spare capacity because reduced demand as the world goes electric the Middle East switches to Renewables and the Chinese econom is slowing down now if you read this report you think that the world’s gotten religional global warming that the entire globe’s turned against fossil fu and there’s nothing the oil companies can do about it to me this is pure wishful thinking we aren’t selling nearly as many EV cars as we were not long ago and the Market’s not growing is most expected hybrids are in Vogue in this nation now not pure electrics we know that two candidates for the president have very different attitudes toward a fossil fuels so I think this iea forecast it may not be accounting for the White House possibly changing hands now if we allow Chinese cars into this country without tariffs instead of the 100% tariff we putting on them electric vehicles would be much much bigger here but that could be a huge threat to the American Auto business they would take over Europe too if it weren’t for the eu’s 38% tariff they just slapped on most Chinese cars the average price of a Chinese electric vehicle is about 10 grand my wife just came back from Italy where she drove in a $10,000 sedan from China and thought it was every bit as good as a Tesla now you might say well that at $20,000 with 100% tarff may still be worth it and it would be the standard re here but you know what if that starts happening I think our government will just raise the Tariff again our government wants to protect the American Auto industry it’s not like Tesla can bring down the price of its sedan to match even the Tariff prices of Chinese electrics no matter what uh musk what happens with his contract or what he can do just can’t and while I’ve been consistently bullish in the future of the oil industry and I remain that way I think it’s possible that we pretty much reach Peak output here we’re beginning to run out of new sights to drills even in the oil Rich permium base now on a day where we saw the producer price index come down I will say this if the iea is right about oil we could have dramatically lower inflation we already know oil would be cheaper if not for the war in the Middle East and the war in Ukraine crout’s now at nearly $78 and the worldw piece I think you could easily imagine it in the low 70s or even in the high 60s second OPEC plus only controls about 48% of the market these days if demand shrinks the way the the Ia is projecting then OPEC would be powerless and the price of crude could be just down dramatically but I don’t see that happening this Supply situation may still be perilous and amazing the discipline of the US Drillers is just PL shocking when oil set up this year the US producers did not ramp up production they they kept it steady there was a time when they’d be pumping like mad to get these new prices so we can hope that there will be an oil glut which would be fabulous for inflation but as I see it the Ia report is merely wishful thinking there’s just too much resistance to free trade with China to make it so electric vehicles are cheap enough to be widely popular in the developed world even as China will surely be using L carb itself because of these cars if we take China’s cars in at the government’s at the Chinese government subsidized price again I have no doubt the Ia report will be correct but the only thing Trump and Biden agree on is the need to stay tough on China so my bottom line I say don’t hold your breath Al like said there always a b Market summer and I promise try to find it just for you right here on M money I’m Jim Kramer see you tomorrow our last call Starts Now [Music] [Music]

CNBC’s Jim Cramer breaks down his outlook on U.S. oil production.