The news in the world of oil is being dominated by the expected record-setting IPO by Aramco. This certainly is big news that will place a very large player on the public markets.
However, something that should not be overlooked is the fact the United States, for the first time since records were kept starting in 1973, exported more crude oil in a given month than it imported.
For the month of September, the United States exported 89,000 more barrels of oil per day than it imported. This has caused an enormous shift in global oil markets.
It was only a decade ago that the United States was importing more than 10 million bpd of crude from around the world. This was from 37 different countries, a revenue source that has long since dried up.
In terms of crude oil, the U.S. still imports more than it exports. However, due to increases in refining capacity, the exact opposite is realized in oil products. In this category, it exports more than it imports. This year, the U.S. is exporting 3.2 million bpd more of petroleum than it imports.
The forecast is for this amount to grow by more than 750,000 bpd in 2020, putting the net exports at close to 4 million bpd.
While the push to alternative fuels has been strong, it is not wise to overlook the staying power of the oil markets. This is not going away any time soon. Even with the incredible rise in electric vehicles, they still account for less than 2% of global car sales. At the same time, there are more than 250M cars, almost all of which use petroleum. It is going to take a couple decades to cycle through all these vehicles.
This is good news for an economy that is on the brink, according to some, of teetering. Energy production is a huge market and the United States exporting more than it imports will help to offset imbalances in global trade deficits.
One of the main questions is how will this trend be affected if the global economy does slow down substantially? Many are asserting the global economy is faring much worse than the United States. Another leg down in the global outlook could cause the United States to lose some of the buyers for it petroleum products.
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