War with Iran Strengthens U.S. Position in the Global Energy Market – FT
26 April 07:11
U.S. companies are barely keeping up with demand for oil and gas. It takes years to launch new oil and gas projects. According to U.S. government estimates, domestic production will increase by only 340,000 barrels per day over the next 12 months. This was reported by the Financial Times, as cited by "Komersant Ukrainian".
Shale operators, who can ramp up production the fastest, fear that the boom will turn into a bust, as Trump frequently states that he wants oil prices to fall to a level that would make many of their high-cost projects unprofitable.
“Washington continues to call for increased drilling while simultaneously signaling that it wants oil prices to return to $60 as soon as possible. You can’t send both signals at the same time and expect capital to respond,” says Kirk Edwards, president of Latigo Petroleum, an independent producer based in the oil-rich Permian Basin in Texas.
Other countries also stand to benefit from higher prices, particularly those in the Western Hemisphere that are increasing their supply the fastest, such as Brazil, Canada, and Guyana.
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However, the chaos caused by the war in Iran is unlikely to benefit the oil and gas industry in the medium to long term.
Energy-importing countries are facing a sharp rise in costs, and some are implementing fuel rationing due to shortages.
Persistently high gasoline prices could accelerate the adoption of electric vehicles, which benefits China, which has rapidly increased exports of low-cost electric vehicles and flooded global markets with them.
According to the energy research group Wood Mackenzie, a prolonged disruption in energy supplies from the Middle East could accelerate structural changes in global energy systems aimed at moving away from oil and gas.
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