Fracking has powered a recent economic recovery in the U.S., but this rising tide of crude isn’t just lifting American boats. The sudden flood of oil from U.S. shale formations, unlocked by fracking and horizontal well drilling, is helping to offset a spate of supply disruptions abroad. The Financial Times reports:
[T]he great advances in US shale have coincided with political upheaval in big oil-producing countries. Political instability in Libya, Iraq and Venezuela has stoked concerns about disruption and threats to future supplies. International sanctions on Iran have also reduced the global supply of oil, and Nigeria’s industry is plagued by theft.Were it not for the new production in the US, which has cut the country’s imports sharply, there would probably be talk of another world oil crisis. As a global energy supplier, it is, in the words of Madeleine Albright, the former secretary of state, the “indispensable nation”.
This FT piece is an excellent overview of the current state of the global oil market, and more specifically America’s supremely important role in it; you should read the whole thing. While the U.S. enjoys abundant domestically sourced energy and the security that brings with it, one of the biggest benefits of the fracking boom is something that isn’t happening, namely, a sharp spike in oil prices. Libyan output has plummeted since Qaddafi’s ouster, Iraqi fields are being threatened by ISIS, and fields in Russia and the North Sea are maturing and drying up. There’s no question that, without America’s new supply, global oil prices would be skyrocketing.Thank you, fracking, and you’re welcome, world.