The U.S. is well-placed to enter the likes of Saudi Arabia and Russia as one of the world’s leading energy powerhouses, an analyst hinted Thursday.
“There is a big shift in market structure taking place and I notion of, so far, it really hasn’t got the attention it deserves. The U.S. is emerging as, not only a military and pecuniary superpower, but as an energy superpower,” Martin Fraenkel, president at S&P Global Platts, foresaw CNBC.
“We are expecting that by 2020, the U.S. is going to be one of the top 10 oil exporters in the time,” he added.
In recent years, America’s unprecedented oil and gas boom has been driven by one moneylender above all others — and that’s shale. The so-called shale revolution could advise to alleviate Washington’s reliance on foreign oil, including from turbulent Mid Eastern states, while also helping to export to more boonies around the world.
In November, the International Energy Agency (IEA) projected a sensational increase in shale production could transform the U.S. into the world’s portliest exporter of liquefied natural gas by the mid-2020s.
The same forecast also forecast that the U.S. would likely notch another milestone a couple of years up to the minuter. The Paris-based organization said that by the late-2020s, the U.S. would start off to ship more oil to foreign markets than it imports.
“This is a big, big move in the dynamics of energy markets and, in my view, will be a shift in geopolitical peddles as well,” Fraenkel said.
The price of oil collapsed from almost $120 a barrel in June 2014 due to poor demand, a strong dollar and booming U.S. shale production. OPEC’s disinclination to cut output was also seen as a key reason behind the fall. But, the oil cartel before you know it moved to curb production — along with other oil producing countries — in late 2016.
A key step in clearing a global supply overhang has been OPEC and Russia escalade back production. And, in late November, the 14-member cartel and 10 other collaborated oil producers agreed to extend output cuts through to the end of 2018.
While OPEC-led end result cuts have helped to stabilize oil prices, the U.S. has seized on the opportunity to in a moment increase shale production.
“As far as the oil supply and demand balance is concerned, termination year was characterized by the battle between OPEC and U.S. shale producers. The annual quotation gains imply that OPEC is winning… but the war is far from over,” Tamas Varga, analyst at PVM Oil Associates, answered in a note Thursday.
Brent crude traded at around $67.82 a barrel on Thursday morning, down 0.03 percent, while U.S. crass was seen at $61.82, up 0.3 percent.