The International Energy Agency forecast that the US could become the world’s top oil exporter by 2024.
The report attributes this to “the incredible strength of its shale industry”, noting that it amounts to “a pivotal milestone that will bring greater diversity of supply in markets.” Although the agency’s full forecast isn’t available for free, it’s still possible to prognosticate the larger consequences that this will have for the global energy industry and International Relations more generally. The US will essentially be in a position to challenge the OPEC+ alliance of Russia and Saudi Arabia, which could become even more conceivable of a possibility if Congress passes the so-called “NOPEC” bill by then too in giving the government the right to sue the aforementioned Great Powers for their oil market coordination and potentially impose sanctions against them in response.
As of 2017, the US’ Energy Information Agency reported that 37% of US oil exports go to Canada, Mexico, and Brazil, which could conceivably ramp up and spread even further throughout the hemisphere as the US seeks to make its part of the world autarkic per its grand strategy aimed at constructing the geopolitical project of “Fortress America”. With this in mind, it can be expected that the US will use its newfound energy superpower status to advance its geostrategic interests, which could naturally extend to competing with Russia and Saudi Arabia for the growing European and Asian marketplaces too, which might lead to a sustained drop in global prices as the resultant glut makes it impossible for OPEC+ to increase them on demand like before.
Should that happen, then the Russian and Saudi budgets could be hit at a very sensitive time during their planned socio-economic transitions of the “Great Society” and Vision 2030 respectively, which could either scale back those ambitious projects or cause the aforementioned governments to redirect funds from other places such as the military-industrial complex to compensate for any sudden loss of anticipated revenue from resource sales. In either case, this might lead to domestic political reactions from their populations that could further destabilize those countries during this time, which both of them must have anticipated might happen and should be assumed to be responsibly taking preemptive countermeasures to offset this scenario. Correspondingly, these potential consequences are speculative and far from guaranteed.
On the other hand, it can be predicted with much more confidence that the US will take advantage of increased revenue from oil sales to fix its own budget deficit and work on making itself strategically independent from the countries that it was previously beholden to in one capacity or another through treasury bonds or oil purchases. While this is undoubtedly in the US’ self-interest, the weakening of the complex interdependence between it and other countries that was caused by decades of globalist practices might free the US to behave more aggressively against its former partners, which would obviously be to those states’ zero-sum detriment. Even so, it’ll probably take until at least 2030 to see any of these possible outcomes, so a lot can still change before then.
By Andrew Korybko
Source: Oriental Review