US oil imports from Opec at 30-year low
US imports of crude oil from Opec nations is at its lowest level in almost 30 years, underlining the impact of the shale revolution on global trade flows.
The lower dependence on imports from the cartel, which pumps a third of the world’s crude, comes amid advances in hydraulic fracturing that has propelled domestic US production to about 9m barrels a day – the highest level since the mid-1980s.
In August, Opec’s share of US crude oil imports dropped to 40 per cent – accounting for 2.9m b/d – the lowest since May 1985, according to Financial Times analysis of US Department of Energy data. At its 1976 peak it stood at about 88 per cent.
The decline in US appetite for foreign oil, alongside expanding eastern demand, has meant producers from the Middle East, west Africa and Latin America have turned towards Asia. But despite the shale boom reducing its oil-import dependency, the US remains the world’s second-largest net oil importer after China.
The impact of the shale boom on Opec members has varied, with African countries such as Algeria and Libya being hit the hardest while Saudi Arabia and Venezuela have remained fairly strong. “It has been Africa that has been severely squeezed,” said Paul Horsnell, an analyst at Standard Chartered.
Nigeria, which produces crude similar to the quality pumped out of North Dakota’s oilfields, has been the biggest victim of the US shale boom. Barrels stopped flowing altogether in July, having reached a 1979 peak of 1.37m b/d.
August imports from Saudi Arabia – Opec’s largest producer – stood at just under 12 per cent of the total, at 894,000 b/d. Analysts say these heavier crude imports have since increased. At its peak, the Gulf nation made up a third of total US imports.
Kuwaiti and Iraqi imports have accelerated while those from the UAE and Qatar have been at nominal levels for decades. Iranian imports are banned under sanctions.
Some analysts say the shale boom has threatened the dominance that Saudi Arabia and other Middle East producers have enjoyed for much of the past century. But Bassam Fattouh, director of the Oxford Institute for Energy Studies, said Opec retained a large influence in global markets. “It is difficult to envisage how a high-cost producer could squeeze a low-cost producer out of the market,” he said in a paper.
Others say Saudi Arabia is the only oil-producing nation with the capacity to increase its production significantly at short notice.
The International Energy Agency, the wealthy nations’ energy watchdog, said the world was still dependent on vast Middle Eastern oil reserves to meet future demand.