US has succeeded in replacing OPEC as the marginal supplier of petroleum to the world because of the shale gas revolution. US imports of crude has been reduced drastically.
Imports in the beginning of this year were 5.2 million bpd, down from 11.2 million at the start of 2009. Due to the ban on exporting crude/petroleum, US shale oil has not been sent overseas.
However, the tremendous growth in US output has made a significant impact on the global markets in the form of reduced crude imports and increased exports of gasoline and other refined products.
US refiners and traders are trying to work around the ban by importing inexpensive domestic oil instead of foreign crude.
In 2013, total imports of crude dropped to 9.8 million bpd from 13.7 million bpd in 2005. During the same time period, product exports rose from 1.1 million bpd to 3.6 million bpd. Exports of diesel nearly doubled and gasoline, LPG and petroleum coke exports have also increased dramatically.
Canada, Mexico and Saudi Arabia are the three greatest suppliers to US. These three suppliers have maintained their sales volumes. However, imports from countries in West Africa, Latin America and the Middle East have been reduced drastically, leaving them with no alternative but to turn to markets in Asia.
US has reduced imports of gasoline from Europe and has become a key supplier of LPG and diesel to countries in Latin America.
The energy revolution in North America and the rapidly developing Asian markets have led to a reversal in the energy flow. The energy flow initially was from East to West. Now the flow is from West to East.
The shale gas revolution in the US has also shifted the marginal source supply to Texas, Oklahoma and North Dakota from Africa, Latin America and the Middle East.
With greater diversification comes greater security. Global oil markets have been largely unaffected by the loss of millions of barrels per day from Syria, South Sudan, Iran and Libya.
Efforts to find shale opportunities in other countries have failed. While US continues to raise production with the help of improved technology, other countries lack specialist crews and equipments, small scale oil producers and private mineral rights.
Shale opportunities are enormous and the financial gains are extremely high. US shale revolution has affected the global oil market. New shale gas developments might arise in Ukraine, South Africa, UK, Argentina and
China by the end of the decade.
No comments:
Post a Comment