Since the arrival of shale gas and then oil, USA has become aggressive in penetrating all nearby markets. It started by exporting gas to the UK, and eventually will to other potential markets in the Far East such as South Korea and Japan.
We should not be surprised if we witness the arrival of USA gas to our country, if it is competing with other suppliers in the world including our gas-rich neighboring countries like Iraq, Iran and Qatar. Their suppliers might also reach Saudi Arabia, Bahrain, and even the United Arab Emirates.
In 2015, the Obama administration had approved export of oil, after 40 years of embargo on crude oil exports. Now with the increased availability of shale oil, American refineries cannot take additional sweet crude. US refineries were built to run middle and heavy types of Middle-Eastern, Venezuelan, and Canadian crude oils, making them sell the light crude oil, and import more than 8 million barrels per day.
The impact of US’s export of oil will be more on OPEC countries with sweet light crude oil, mostly African countries like Nigeria, Algeria, and Libya. They will be forced to resort to the developing Asian countries, creating huge competition which will in turn push the oil prices further down.
The oil market is very open now. The USA is likely to reach more than 10 million of local production by next year. Its export of sweet crude oil will be increasing gradually to the core markets of OPEC and Russia in Europe.
The export facilities are ready for the export of more than 2.7 million barrels per day from next year. The US government’s funds will be very happy in supporting such a business opportunity that started from zero about five years ago. This is the nature of business — always competitive and always creative when it comes to making cash.
Email: naftikuwaiti@yahoo.com
By Kamel Al-Harami
Independent Oil Analyst