US oil boom reduces Middle East influence on oil price

Washington, Jan 6 (IANS) The US oil boom has changed the world’s geopolitics of energy, reducing the influence of the Middle East on oil prices, the American Petroleum Institute (API) said on Wednesday.

“The American energy renaissance” is the key reason why the recent conflicts between Saudi Arabia and Iran did not raise the world’s oil price, Xinhua cited Jack Gerard, president of the API, as saying.

“If such unrest happened 10 years ago, I believe there would be a significant movement in the price of oil,” he said.

Gerard said the geopolitics of energy has changed significantly over the last decade as the US has experienced an oil boom in recent years and the daily production is now around nine million barrels a day.

The US has been the world’s largest oil producer since 2013, surpassing Russia and Saudi Arabia, according to the data of the US Energy Information Administration (EIA).

The US government lifted the 40-year-old crude oil export ban in December last year, connecting the huge US oil output to the world market.

The United States has become “one alternative” for the world oil supply if some oil-producing countries were affected by unrest, Gerard said, adding the market “reflected that” over the past couple of days as unrest continued and tension increased in the Middle East.

On Sunday, Saudi Arabia cut off diplomatic relations with Iran after protesters stormed its embassy in Tehran to protest against the execution of the prominent Shia cleric Sheikh Nimr al-Nimr.

On Monday, three Sunni-led countries — Bahrain, Sudan and the United Arab Emirates — joined Saudi Arabia in severing or downgrading diplomatic ties with Iran, adding to the fraught atmosphere in the region.

The conflicts among major Middle East oil producers raised concerns about an oil price hike, but the international oil prices kept falling on Monday and Tuesday.

The US West Texas Intermediate (WTI) crude moved down 79 cents to settle at $35.97 a barrel on Tuesday, while Brent crude decreased 80 cents to close at $36.42 a barrel.

Leave a Reply

Please enter your comment!

The opinions, views, and thoughts expressed by the readers and those providing comments are theirs alone and do not reflect the opinions of www.mangalorean.com or any employee thereof. www.mangalorean.com is not responsible for the accuracy of any of the information supplied by the readers. Responsibility for the content of comments belongs to the commenter alone.  

We request the readers to refrain from posting defamatory, inflammatory comments and not indulge in personal attacks. However, it is obligatory on the part of www.mangalorean.com to provide the IP address and other details of senders of such comments to the concerned authorities upon their request.

Hence we request all our readers to help us to delete comments that do not follow these guidelines by informing us at  info@mangalorean.com. Lets work together to keep the comments clean and worthful, thereby make a difference in the community.

Please enter your name here