News / Middle East

    US Oil Surge Could Impact Mideast Geopolitics

    US Oil Surge Could Impact Mideast Geopoliticsi
    X
    May 22, 2013 1:45 PM
    The United States will account for a third of new oil supplies over the next five years, and will become energy self-sufficient in 20 years, according to a new report by the Paris-based International Energy Agency (IEA). Although U.S. oil imports from Arab Gulf countries increased last year, analysts predict the U.S. will lose its dependence on Middle East imports, which is expected to have a huge impact on international relations and the balance of power. VOA's Henry Ridgewell reports.
    US Oil Surge Could Impact Mideast Geopolitics
    Henry Ridgwell
    The United States will account for a third of new oil supplies over the next five years, and will become energy self-sufficient in 20 years, according to a new report by the Paris-based International Energy Agency (IEA). 

    Although U.S. oil imports from Arab Gulf countries increased last year, analysts predict the U.S. will lose its dependence on Middle East imports, which is expected to have a huge impact on international relations and the balance of power. 

    The IEA report describes a 'supply shock' from the United States rippling through world oil markets.

    "The key to it is the resurgence of shale development in the United States," John Mitchell, an oil market analyst at policy institute Chatham House in London. "It has been building up over some years, but only in the last three years has it reached big proportions."

    Shale oil and gas are extracted using pressurized fluid to blast the product out from the rock, a process known as hydraulic fracturing or 'fracking.' Some U.S. states and European countries have banned the practice over fears that it may cause pollution and even earthquakes.

    But the technology will help the United States become largely self-sufficient in oil by 2035, according to the IEA. U.S. gas production is expected to overtake Russia.

    When that happens, the concept of energy security will no longer dictate U.S. foreign policy.

    "Will the Middle East still be so dependent on U.S. military support?" Mitchell asked. "I am sure the answer is probably yes, but maybe the U.S. does not have quite the same interest in that as it did before."

    A more energy self-sufficient United States has dramatic implications for Middle East politics, according to Christopher Davidson of England's University of Durham, and  author of the book After the Sheikhs: The Coming Collapse of the Gulf Monarchies.

    "What we are also likely to see is the United States start to hedge its positions a bit better on the Gulf monarchies," Davidson said. "As it loses the dependent nature of this economic partnership, we are perhaps starting to see the U.S. already starting to reach out to opposition groups in Bahrain, for example, and increasingly in Saudi Arabia."

    In the midst of the Arab Spring, Davidson says many oil-rich Gulf monarchies are trying to pacify their populations with government handouts. Falling receipts from oil exports could trigger political upheaval.

    "Within just a couple of years we'll have a public spending deficit in most of the Gulf monarchies," Davidson said. "At the same time, we are also seeing the demonstration effect of the Arab Spring in Syria and north Africa starting to embolden the people of these countries. They are no longer willing to tolerate autocracy."

    Davidson says Gulf states will be gearing their oil exports eastwards in the coming decades.

    "However, what is missing is the security relationship that the Western powers have historically provided to the Gulf," he said. "The Gulf states know, and I suspect they are bluffing, that China and the Pacific Asian states cannot replace the West as this ultimate security guarantor."

    Analysts say the oil boom will give the U.S. economy a competitive advantage with cheap energy supplies no longer vulnerable to global geopolitics.

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    Comments
         
    by: hallofrecord from: Michigan
    May 22, 2013 5:32 PM
    The "energy independence" image is convenient, but not exactly correct. Given the global marketplace, it is quite possible that the U.S. could be both an importer and an exporter of oil and natural gas simultaneously. It all depends on the delivery infrastructure. It may make more sense logistically and economically to import some oil from Canada and Mexico while exporting some "domestic" oil to other countries.

    But the article is correct in that U.S. reliance on Middle Eastern oil will wane. That will not be the case for Europe and China.

    Europe has chosen to "go green" and abandon its energy base. Therefore, Europe will be at the mercy of Russia and the Middle East for its energy requirements unless the U.S. can economically supply some of its needs..

    China may eventually develop shale resources sufficient for a large part of its needs, but it still relies on importing coal in large quantities.

    The Middle East oildoms will eventually be force to either try to undercut competition, which will lower prices globally and restrict their income, or attempt to convince the dependent areas of the world that they are a reliable and worthy source, which may be increasingly difficult as Islamic activism and destabilization is an increasing concern globally.

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