U.S. Energy Helps Cushion Global Supply Shock From Hormuz
Meets Six Sweeping Demands What I Cover Tsvetana Paraskova is an energy and commodities journalist who has contributed to Oilprice.com for nearly a decade, covering global energy markets, commodities,… The U.S.
energy system has helped mitigate the shock loss of oil and LNG supply from the Middle East when the Strait of Hormuz closed to traffic and sent refiners and gas importers worldwide scrambling for alternative supply.
The record American crude oil production and huge natural gas production and rising LNG exports were decades in the making, during which companies invested billions of dollars every year to increase oil, natural gas, and fuel supply, the American Petroleum Institute (API) said in ananalysisthis week.
But the role of “the world’s energy stabilizer”, as API put it in its article, comes at a cost for the U.S.
America’s inventories of crude oil and petroleum products have slumped below the five-year average for this time of year, leaving narrow margins of error in the production, refining, and export systems.
The disruption caused by the Iran war hasn’t gone away, but the record U.S.
oil output and fuel exports have kept crude oil prices in check for most of the past five months, alongside perpetual market hopes that a resolution of the conflict is imminent.
“Markets remain tight, inventories are low and uncertainty around the Strait of Hormuz and other key shipping lanes persists.
Yet, America's energy system has helped cushion what could have been a much more severe shock,” API said.Related: ADNOC Reports 15 Vessel Attacks as Hormuz Risks Mount Since the shale revolution began, the U.S.
oil and natural gas industry has invested about $150 billion every year in oil and natural gas upstream production alone, according to API’s estimates.
Those investments, adding to billions more poured in pipelines, export terminals, and other critical infrastructure, fundamentally changed America’s role in global energy markets, the oil lobby says.
role has indeed changed, with record crude oil production and exports, andrecord exportsof fuels in recent months as the world is reeling from the crisis triggered by the war in Iran and the closure of the Strait of Hormuz.
| Product | Price | Change |
|---|---|---|
| Brent Crude | $102.14/bbl | +0.34% |
| WTI Crude | $96.90/bbl | +0.21% |
| EN590 Diesel | $846/MT | +0.18% |
| Jet Fuel A-1 | $1090/MT | +0.55% |
| Mazut M100 | $450/MT | -0.15% |
| Bitumen 60/70 | $470/MT | +0.08% |
| Sulphur Gran 99.5% | $470/MT | -0.44% |
| Urea 46% Gran | $650/MT | +1.12% |
| NPK 16-16-16 | $460/MT | -0.28% |
| Nat Gas TTF | $15.42/MMBtu | +0.92% |
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