February 26, 2017

FRACK, BABY, FRACK: Shale Is Reshaping America’s Oil Trade Balance.

America’s crude trade balance is changing. On the import front, the decision by petrostates to cut production (with the intention of erasing a global oil glut to help induce a price rebound) is expected to reduce the amount of oil the U.S. buys from Saudi Arabia and Iraq. Those OPEC members have been constraining output since the beginning of the year, but because it takes roughly six weeks to ship crude from the Middle East to the Americas, we haven’t yet started to see a reduction in supplies from the region.

Now, however, analysts are expecting Saudi and Iraqi imports to start declining as those cuts start to make American oil more attractive to U.S. refiners than their Middle East competitors. . . .

Of course, U.S. oil production has a pivotal role to play in all of this. The shale revolution was the chief reason behind the market oversupply that necessitated these petrostate cuts in the first place, and our rising oil output isn’t just changing how we’re buying crude, it’s also changing how we’re selling it. As Bloomberg reports, our exports are surging to a 24-year high.

I’m old enough to remember when President Obama mocked Sarah Palin by saying we couldn’t drill our way out of our energy shortage.

InstaPundit is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com.