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The United States will lead oil-supply growth over the next six years, thanks to the incredible strength of its shale industry, triggering a rapid transformation of global oil markets. By 2024, the United States will export more oil than Russia and will close in on Saudi Arabia – a pivotal milestone that will bring greater diversity of supply in markets.

Oil 2019, Analysis and Forecasts to 2024, International Energy Agency

United States has traditionally sought to protect its oil reserves and has never been keen on being the biggest exporter of oil. In fact it has constantly been accused of stirring up wars in the middle east to hoard more oil.

Why is it starting to export oil bigtime now? What's causing this policy shift?

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    Is this controlled as a matter of policy? Obviously the US government can set Tariffs on export for oil, but if there's a market and profits to be made, then an oil producer can surely sell where ever they like? – Jontia Mar 11 at 10:11
  • Why were they not liking it for hundreds of years before? – Hanky Panky Mar 11 at 10:44
  • Whether the people in the USA like it or not, today, it is impossible to embargo Russia oil export. With abundance of shale, it is not wise to keep the oil price high, as Russia has more to gain from it. – mootmoot Mar 11 at 18:08
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Between 1973 and 2016 the US banned the export of Crude Oil while allowing the export of refined fuel products. This lead to internal producers having to sell their product locally and refineries in the US gearing towards this product, which was cheaper because of the limited market. This produce was a heavy crude oil.

The expansion of Shale in recent years led to lobbying to reverse this ban, which succeeded in 2016. Additionally the kind of oil being produced from shale is different to more traditional US oil. Older oil sources are heavier and sourer, meaning it contains larger hydrocarbon molecules as well as more sulfur. Refineries would have to make significant changes to process this oil and continue to prefer to import heavier crudes from Canada and Venezuela, leaving a surplus of Sweet crudes for export.

So the US is increasing Oil exports because it's producing more oil, the oil it's producing isn't a kind that local refineries want to buy and the industry has successfully lobbied to make it legal to do so.

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As your quote says, it is due to “the incredible strength of the shale industry.”

Because of hydraulic fracturing, United States oil production has increased dramatically, to the point where it has more oil than it needs to import. Given the large supply, it is no longer advantageous to “hoard” oil (which, I would argue it wasn’t doing, but that is not necessary to get into for this answer).

  • Recommend highlighting that oil production has increased specifically because technological advancements have made more oil available at economical levels. – Drunk Cynic Mar 11 at 13:24
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    "Hydraulic fracturing" is the relevant technological advance. – Joe Mar 11 at 16:23
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    It is more than that. With the question focused on oil reserves, the gains made through the introduction of hyrdraulic fracturing have increased the amount of accessible oil. The reserves remain relatively untouched; oil that was previously uneconomic to process is now marketable. – Drunk Cynic Mar 11 at 18:33
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There is another reason. Probably not a direct cause, but it does merit mention: stabilizing the global economy.

When the world's economy is dependent upon the most politically unstable region on earth, bad things happen. The bulk of Middle East oil gets shipped through the Strait of Hormuz, a narrow passage between two antagonistic countries; Saudi Arabia and Iran. It would be very easy for one of those two to close that to maritime shipping, plunging the global economy into recession. The constant presence of a US carrier battle group in that area is one reason this hasn't already happened.

The less the world depends upon that narrow passage, the less the impact of a disruption of Middle East oil on the global economy, which also means fewer armed conflicts. Most of the major conflicts of the last 30 years have involved the global oil supply. That's why the western nations intervened in Libya, but not Rwanda.

This also holds true when another major oil supplier, Venezuela, plunges into political chaos.

If the US plays a major role in global energy production, the end result is a more stable energy supply and a more robust global economy, which is good for everyone, not just the US. If one looks beyond the over the top hyperbole in current US politics, the differences between left and right are fairly trivial, when compared to ideological conflicts elsewhere, or in the past. It is a politically stable country.

Being a major oil exporter also makes net importer nations more economically dependent on the US. That is political and economic leverage, which may come in handy in other areas. If another major power that is almost totally dependent upon oil imports starts muscling its neighbors, fear of having its economy torpedoed by a restriction of energy supply can keep it in check, without a single shot being fired.

  • I voted this up as I think it is extremely relevant. But ofcourse if a wide scale massively destructive fracking-induced earthquake happens in a major oil producing region of the United States.... – ouflak Mar 13 at 8:28

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