Released June 01, 2022 | SUGAR LAND
en
Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--One single field in the U.S. is set to overtake OPEC-member Iraq in terms of oil production gains, giving the nation a unique geopolitical advantage should the opportunity arise.
Data from Norwegian consultancy Rystad Energy show production from the Permian shale basin is expected to reach 6.5 million barrels per day (BBL/d) next year. Annual gains of about 1 million BBL/d from the Permian, meanwhile, will eclipse Iraq's estimated increase of 400,000 BBL/d by 2023.
And compared to other countries, only Russia and Saudi Arabia are producing more. So far, Saudi Arabia has not shown much desire to put more oil on the market as the de facto head of the Organization of the Petroleum Exporting Countries. Russia's output, meanwhile, will dwindle not by desire, but by foreign intent.
On Tuesday, the European Union (EU) reached its long-awaited agreement to cut back on Russian oil purchases to punish the Kremlin for the February military invasion of a sovereign Ukraine.
"This is very important," said EU President Ursula von der Leyen.
The EU agreement aims to cut back on Russian crude oil imports by 90% by the end of the year. Concessions were offered for land-locked countries, such as Hungary, which have few other options and would thus face severe economic challenges without Russian oil.
The dense network of pipelines moving west from Russia carry mostly natural gas, but Russia's Druzbha pipeline is among the largest crude oil arteries in the world, accounting for about 30% of total Russian crude oil deliveries. The rest comes to Europe by ship and will leave a void of around 1.5 million BBL/d in the not-too-distant future.
That ban, according to the analysts at London oil broker PVM, is akin to an economic war between Russia and Europe.
There's an adage in international relations theory that states if goods cannot cross borders, armies will. It's quite possible that the ban only exacerbates tensions on the European continent and war of a different kind will erupt again.
When the dust settled after the last conflict that gripped the European continent, it was left to the U.S., the only superpower left standing, to pick up the pieces. As such, a broken Europe was re-assembled under the auspices of the Marshall Plan. That plan not only rebuilt the European economy, but created a viable trading partner for the export of U.S. goods.
The U.S. is on the cusp of becoming, if it's not already, the world leader in exports of liquefied natural gas. If we consider the fact, meanwhile, that the Permian is but one field, we could expect the U.S. to move to the top of the heap in terms of crude oil exports as well.
There is the potential then to revisit what conservative political pundit Charles Krauthammer dubbed "The Unipolar Moment" -- that brief period when the U.S. was alone at the top of the world order after the Soviet Union collapsed.
Some 30-odd years later, Russia is accused of using its natural resources for geopolitical leverage, but why shouldn't it? Wasn't the Marshall Plan a geopolitical move as well? Could the U.S. revisit that strategy with its own natural reserves?
Russia, meanwhile, may very well end up as a pariah state, though like other pariahs such as Iran and Venezuela, its reserves may be too big to ignore. But so too are the reserves in the U.S.
The unipolar moment was a questionable conclusion to reach after the collapse of the Soviet Union. If such a geopolitical achievement was reached, it was very brief. Another conclusion would be that geopolitics rarely reach a definitive end. Therefore, if conflicts evolve rather than end, it seems that the Cold War is alive and well and running through the energy networks of Europe.
Industrial Info Resources (IIR) is the world's leading provider of market intelligence across the upstream, midstream and downstream energy markets and all other major industrial markets. IIR's Global Market Intelligence Platform (GMI) supports our end-users across their core businesses, and helps them connect trends across multiple markets with access to real, qualified and validated project opportunities. Follow IIR on: LinkedIn.
Data from Norwegian consultancy Rystad Energy show production from the Permian shale basin is expected to reach 6.5 million barrels per day (BBL/d) next year. Annual gains of about 1 million BBL/d from the Permian, meanwhile, will eclipse Iraq's estimated increase of 400,000 BBL/d by 2023.
And compared to other countries, only Russia and Saudi Arabia are producing more. So far, Saudi Arabia has not shown much desire to put more oil on the market as the de facto head of the Organization of the Petroleum Exporting Countries. Russia's output, meanwhile, will dwindle not by desire, but by foreign intent.
On Tuesday, the European Union (EU) reached its long-awaited agreement to cut back on Russian oil purchases to punish the Kremlin for the February military invasion of a sovereign Ukraine.
"This is very important," said EU President Ursula von der Leyen.
The EU agreement aims to cut back on Russian crude oil imports by 90% by the end of the year. Concessions were offered for land-locked countries, such as Hungary, which have few other options and would thus face severe economic challenges without Russian oil.
The dense network of pipelines moving west from Russia carry mostly natural gas, but Russia's Druzbha pipeline is among the largest crude oil arteries in the world, accounting for about 30% of total Russian crude oil deliveries. The rest comes to Europe by ship and will leave a void of around 1.5 million BBL/d in the not-too-distant future.
That ban, according to the analysts at London oil broker PVM, is akin to an economic war between Russia and Europe.
There's an adage in international relations theory that states if goods cannot cross borders, armies will. It's quite possible that the ban only exacerbates tensions on the European continent and war of a different kind will erupt again.
When the dust settled after the last conflict that gripped the European continent, it was left to the U.S., the only superpower left standing, to pick up the pieces. As such, a broken Europe was re-assembled under the auspices of the Marshall Plan. That plan not only rebuilt the European economy, but created a viable trading partner for the export of U.S. goods.
The U.S. is on the cusp of becoming, if it's not already, the world leader in exports of liquefied natural gas. If we consider the fact, meanwhile, that the Permian is but one field, we could expect the U.S. to move to the top of the heap in terms of crude oil exports as well.
There is the potential then to revisit what conservative political pundit Charles Krauthammer dubbed "The Unipolar Moment" -- that brief period when the U.S. was alone at the top of the world order after the Soviet Union collapsed.
Some 30-odd years later, Russia is accused of using its natural resources for geopolitical leverage, but why shouldn't it? Wasn't the Marshall Plan a geopolitical move as well? Could the U.S. revisit that strategy with its own natural reserves?
Russia, meanwhile, may very well end up as a pariah state, though like other pariahs such as Iran and Venezuela, its reserves may be too big to ignore. But so too are the reserves in the U.S.
The unipolar moment was a questionable conclusion to reach after the collapse of the Soviet Union. If such a geopolitical achievement was reached, it was very brief. Another conclusion would be that geopolitics rarely reach a definitive end. Therefore, if conflicts evolve rather than end, it seems that the Cold War is alive and well and running through the energy networks of Europe.
Industrial Info Resources (IIR) is the world's leading provider of market intelligence across the upstream, midstream and downstream energy markets and all other major industrial markets. IIR's Global Market Intelligence Platform (GMI) supports our end-users across their core businesses, and helps them connect trends across multiple markets with access to real, qualified and validated project opportunities. Follow IIR on: LinkedIn.
