Donald Trump gave a televised speech about the standoff with Iran and broke analysts’ expectations for oil trading prices. Trump stated the US attained energy independence, and the country no longer needs the oil of the Middle East. He mentioned the US is the top producer of oil and natural gas anywhere in the world.
The supply of oil is growing faster than demand. Concerns about the crisis in the oil market have been great. Climate change harmed oil consumption, and it weakened the global economy.
The Wilderness Society reports the Trump administration continues keeping American people in the dark. The nation’s public lands and waters provide a chance to act immediately on climate change. They reduce fossil fuel emissions and protecting valuable carbon basins. The federal government should be ensuring nature is working for us, not against us, in the fight against climate change, said Chase Huntley, energy and climate director at The Wilderness Society.
Oil Industry Full of Booms and Busts
On January 3, the murder of Major general Qassim Soleimani, the Supreme Commander of the Iranian Republic, caused the world to tremble by fear of the prospect of high oil prices.
The significant rise in oil prices followed the Iranian retaliatory attacks on Iraqi bases sheltering American forces. The rapid return to tranquility in the oil market was confirmed by a sharp decline in the Middle east in the crude oil market.
The increase in global oil production capacity made the market less vulnerable to events threatening supply disruptions. This event primarily due to the shale revolution in the United States,
The Middle East’s share in global oil exports fell to about 35% in 2018, down from more than 50% in 1980, immediately after the second oil crisis.
Besides, oil production increased in Russia and Latin America. The abundance of supplies has put intense downward pressure on prices. For the first time since 1973, the US became a net exporter for oil.
Non-OPEC Countries will Create a Surplus Capacity of Oil
Also, other oil-producing countries outside the Middle East are working to increase production. The new oil fields that will start operations in non-OPEC countries, in theory, will create a surplus capacity of about 7.7 million barrels per day in the six years leading to 2023. Most of the oil fields that will begin operating during this period are projects funded in the first half of 2010 when crude oil prices rose about $100 a barrel.
Equinor ASA, a Norwegian-based multinational oil and gas company, began operating the Johann Sverdrup oil field in the North Sea in October. With a maximum daily production of 440,000 barrels, the oil field expects to account for about 20% of Norway’s oil production.
Latin American oil producers such as Brazil and Guyana are developing new oil fields. This will make the region less dependent on imports.
Global oil demand will increase by about 4.85 million barrels during the period 2018-2023. Mainly due to economic growth in emerging Asian countries, according to the US Department of Energy.
