Five years ago, when the first batch of U.S. shale oil was exported to Italy, U.S. shale oil exports began to reshape the global oil market and change the geopolitical landscape.
The shale oil boom itself has made the United States the world’s largest oil producer and brought it closer to its long-held dream of ending its dependence on Middle Eastern oil.
At the same time, the shale oil export boom has created a new oil market. Crude oil extracted from shale oil fields in Texas, New Mexico and North Dakota is sold to more than 50 countries around the world and exported. More than any other OPEC country except Saudi Arabia.
The past five years have been the golden years for U.S. shale oil exports, but the health events in 2020 have sharply reduced fuel demand and led to the bankruptcy of more than 40 drilling companies across the United States. . Exactly how much oil will be exported from U.S. shores around the world in the next few years depends largely on two factors: first, how quickly the world economy can recover from the epidemic; second, U.S. energy How restrictive are policies on fossil fuels?
However, the global influence of U.S. shale oil has changed the oil market forever, and for the United States, shale oil remains a powerful diplomatic weapon.
Karim Fawaz, director of energy research and analysis at IHS Markit, said: “The shale gas revolution has increased supply in the global oil market and has also liberated the U.S. refining industry and exceeded U.S. domestic refining capacity. restrictions.”
Nothing has benefited the most from the U.S. shale oil export boom than U.S. oil producers and commodity giants engaged in oil trading. As exports grow, billionaires Harold Hamm of Continental Resources Inc. and Scott Sheffield of Pioneer Natural Resources Co. Revenue more than doubled.
Oil trading giants profit from buying cheaper shale oil and exporting it from U.S. shores to Europe and Asia. They have expanded their oil trading arm in the United States, investing in ports, pipelines and export facilities. As of 2019, U.S. oil exports reached nearly 4.5 million barrels per day.
U.S. shale oil has caused losses to OPEC
The United States was once one of OPEC’s largest customers, but as shale oil flooded into the market, OPEC was forced to cede market share. The United States has cut monthly oil imports from OPEC by about 50% since mid-2006. Last week, Saudi crude oil shipments to the United States fell to zero for the first time since 2010.
U.S. shale oil has become a thorn in OPEC’s side. Over the past five years, U.S. shale oil has continued to expand its market share, forcing OPEC to join forces with Russia, Mexico and other major oil producers to repeatedly cut production.
Today, the United States is a major exporter of shale oil, which has both advantages and disadvantages. In March 2020, U.S. President Donald Trump, together with the leaders of the world’s largest oil producers, hammered out an unprecedented deal to save the oil market and avoid a complete collapse in oil prices due to a sharp drop in oil demand.
The U.S.’s reduced reliance on foreign imported oil also allows the Trump administration to impose sanctions on Venezuela and Iran, two founding members of OPEC, without having to worry about rising domestic fuel prices. With U.S. shale oil readily available on global markets, conflicts in the Middle East will have less of an impact on oil prices.
“Even at a time when political factors are causing Iran, Venezuela and Libya to cut off oil supplies, U.S. oil Supply also maintains the balance of global oil supplies.”
The global influence of U.S. crude oil remains to be seen
The first is the Asian market . A good sign for U.S. oil exports is that China’s demand for crude oil has rebounded significantly, helping to reduce U.S. oil inventories. U.S. oil shipments began to load again, reaching 3.6 million barrels per day during the Christmas week.
No country is more decisive than China in determining the fate of U.S. oil exports. About two years after the U.S. lifted its shale oil export ban, crude oil exports to China have reached 2 million barrels per day, making China the largest buyer of U.S. crude.
China’s demand for crude oil has rebounded since the blockade was lifted, but Saudi Arabia and Russia remain the main suppliers, with U.S. and OPEC sales in the Chinese market later this year as OPEC+ resumes output. Competition may heat up.
Shirin Lakhani, senior oil analyst at Rapidan Energy Group, said: “As OPEC+ resumes some production, the Asian market will become more competitive. For OPEC+ producers, selling petroleum products to Asia has the highest profit margins due to geographical proximity and developed logistics.”
Demand for U.S. crude oil will also depend on the global economy performance in the coming years. World Bank�It is expected that the economy will grow by 4% this year after shrinking by 4.3% in 2020. Because the epidemic may reduce the potential growth of the global economy over the next decade, the International Energy Agency said in December last year that the oil glut caused by the epidemic will take until the end of 2021 to eliminate as demand will be lower than expected.
In addition, the incoming Biden and his plan to reshape US energy policy will undoubtedly affect US oil exports. The president-elect made promises on the campaign trail: tightening regulations on the fracking technology that spawned the U.S. shale boom, banning fracking on federal lands and moving away from fossil fuels more broadly fuel.
Depending on how it is enforced, the ban itself may not have a significant impact on U.S. oil shipments. In theory, it only applies to new drilling permits and affects fairly limited new shale oil production.
For OPEC oil exporters, the benefits are temporary. A growing number of national leaders are pledging to permanently wean their countries off fossil fuels. More than 120 countries, including China, the UK and Canada, have pledged to achieve net-zero emissions over the next 30 years. Biden himself has promised that the United States will achieve net-zero emissions by 2050. Each country’s carbon neutrality plans center on electricity energy, which will have a large impact on fuel demand.
According to relevant agency estimates, global annual sales of electric vehicles reached nearly 27 million vehicles in 2019, and will accelerate in the next few years, reaching 133 million vehicles per year in the next 20 years. By 2040, about 500 million passenger cars will be on the road, accounting for about one-third of the world’s total passenger cars.
But as long as the world’s energy remains largely dependent on fossil fuels, shale oil will continue to compete for its share of the global energy market.
Lahani said: “The lifting of the export ban, coupled with the amazing growth and resilience of domestic shale oil, will allow the United States to continue to be an important exporter of crude oil for the foreseeable future.”</p
