Exports from U.S. “tight oil” extracted from shale formations alone may swell to over 3 million barrels a day by 2022 — with a third of that volume absorbed by Asia — said Ed Rawle, chief economist at Wood Mackenzie.
That signals a change in the energy world order as OPEC influence wanes. Some energy commentators believe the fracking boom has helped the U.S. take the title of the world’s “swing” producer from Saudi Arabia. The Americans, it’s thought, now possess the capacity to respond to fluctuations in market demand.
As tankers laden with U.S. crude move eastwards, OPEC is sure to take notice.
“Traditional OPEC suppliers will need to watch this space and price their crude competitively as up to 50 percent of incremental crudes into Asia could come from non-OPEC,” Rawle said.
Whether more U.S. crude gets shipped east will hinge on how fast capacity can be added to key U.S. export terminals such as the Louisiana Offshore Oil Port, America’s only deep-water tanker port in the Gulf of Mexico.
“The emergence of the U.S. as a significant exporter to Europe or Asia will only be progressive and contingent on the development of Gulf Coast export capacity and crude price differentials remaining favorable,” said Harry Tchilinguirian, global head of commodity markets strategy at BNP Paribas. “For now, these exports remain opportunistic.”
