The world’s richest commodity, oil, is on course to make America the largest exporter by 2024, according to the International Energy Agency (IEA). The move, which is feared to unseat US’ ties with Saudi Arabia, is spelling trouble for the Gulf nation.
The blueprint from IEA comes just weeks after the US exported a record 3.6 million barrels per day (bpd) of crude oil. Apart from that, the nation also exports about 5 million bpd of petroleum products, including refined fuels like gasoline.
The shipments will surge in the coming future as crude production from the nation’s shield shale fields continue to boom; IEA further assessed in its five-year oil forecast. The US topped Saudi and Russia last year to become the world’s biggest oil producers in 2018.
However, this doesn’t seem to have gone down well with the Saudis. In order to keep their revenue and production on track, the Kingdom’s state-owned company Aramco implemented continuous cuts in oil production.
The cuts imply that as the production decreases, the demand goes higher. Where, the upward pressure leads to a higher price of the commodity, resulting in the increase of revenue. The latest cut announcement came on Monday, when the state-owned firm announced to cut its oil-exports to below 7 million barrels per day, in April.
“Despite very strong demand from international waterborne customers at more than 7.6 million bpd, customers were allocated less than 7 million bpd,” the Saudi official said conforming the move.
In recent years, Saudi and Russia have joined forces, coordinating oil production among OPEC and other oil producing nations. The cartel better known as OPEC+, has capped output for much of the last two years, helping boost oil prices after an impactful production by the US.
The economy of Saudi Arabia is largely dependent on the fuel efficiency and the sapping demand of oil all over the world. Though the nation has regularly stated diversifying, to lessen the dependency on oil, it is still largely dependent upon commodity to generate revenues.
Therefore, with the increasing threat from the US, the Kingdom’s retaliation to defeat the nation is indeed on cards. It appears that on oily grounds, all Saudi Arabia wants is America to slip below par once again.
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