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A Global Energy Superpower Rises

Ed Morse, Foreign Policy

When it comes to crude oil and other hydrocarbons, the United States is bursting at the seams. The United States has very rapidly become a powerhouse as an exporter of finished petroleum products, natural gas liquids, other oils including ethanol, and even crude oil

A Global Energy Superpower Rises

Total gross exports of all of these combined is expected to reach 5 million barrels per day (mb/d) or more by the end of this year, up a stunning 4 mb/d since 2005. Total oil exports in 2014 pushed the commodity to the top of the list of U.S. exports by category, far surpassing all agricultural products, capital goods, even aircraft as the largest sector of U.S. export trade. Meanwhile, U.S. crude oil exports, largely to Canada, are 500 percent above what they were a year before, and are heading for around 500,000 b/d by year end.

This remarkable boom is unlikely to stop even if prevailing prices for oil fall as low as $50. Indeed, even if light sweet crude (WTI) prices fell below $75 for a while, production growth would continue at relatively high levels for years to come. While the debate in the United States intensifies over whether the country should lift restrictions dating back to the 1970s on exporting crude oil, facts on the ground are changing faster than policymakers in Washington recognize — or global markets are ready to realize. As U.S. hydrocarbon trade flows get turned on their head, oil exporter countries lose their largest market, and face greater competition in the rest of the world. The global impact on energy prices, global trade and investment flows, petrostate revenues and political stability, and economic boosts to net importer countries and consumers are resulting in broad economic and geopolitical shifts that are beginning to ripple through the world.

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