The final days of the year are bringing fresh data points that underscore a seismic 2022 story: the reshuffling of the global oil-and-gas trade spurred by Russia’s attack on Ukraine, Ben writes.
Driving the news: Reuters has a good look at why U.S. crude exports are hitting fresh records, noting the U.S. might even become a net crude exporter next year.
“Russia’s invasion of Ukraine has spurred new demand for U.S. energy and should push oil exports above imports late next year assuming shale output accelerates,” Vortexa analyst Rohit Rathod tells Reuters.
“Assuming shale output accelerates” is doing some work, given stalled output growth, but the export rise is unmistakable (see above).
Quick reminder: The U.S. is already a net petro exporter when you include refined products.
Meanwhile, months of sanctions to isolate Vladimir Putin appear slated to weaken Russia’s still-considerable petro-might.
The latest steps — the EU’s ban on seaborne crude and the G7 price cap — are new.
But Bloomberg reports Russia’s tanker exports “collapsed in the first full week of [G7] sanctions targeting Moscow’s petroleum revenues.”
What we don’t know: How much Russia’s huge production is ultimately affected.
The most recent outlook from the Energy Department’s analysis arm projects most Russian barrels shunned by Europe will go elsewhere. But they also see Russian production falling in 2023.
The big picture: Needless to say the gas landscape has shifted too, with Europe becoming thirstier for LNG from the U.S. and elsewhere to replace Russian supplies.
“I think 2022 was the year in which the world was awoken from a collective complacency about energy security,” said Columbia University’s Jason Bordoff on the latest podcast from Columbia’s energy think tank.
What we’re watching: In 2023 and beyond, how the U.S. navigates twin goals of curbing fossil fuels to battle climate change while keeping the geopolitical leverage that petro exports provide.
