Middle East Oil

Middle East Oil Supply, Demand and Conflicts

The U.S. continues to develop independent sources of petroleum and alternatives but still depends on significant imports brought through the Strait of Hormuz (photo by NASA). Asia consumes about three-fourths of Persian Gulf oil. This week Iran attacked two tankers and an American drone. Last month four tankers were attacked in the Gulf of Oman. Will a new war be fought over oil or can war be avoided such as by us becoming less dependent on hydrocarbons?

The International Energy Agency states, “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.”

The U.S. Energy Information Agency (EIA) provides weekly, monthly, and annual updates on petroleum supply and demand. EIA reported that the Strait of Hormuz, “located between Oman and Iran, connects the Persian Gulf with the Gulf of Oman and the Arabian Sea. The Strait of Hormuz is the world's most important oil chokepoint because of the large volumes of oil that flow through the strait. In 2018, its daily oil flow averaged 21 million barrels per day (b/d), or the equivalent of about 21% of global petroleum liquids consumption. Flows through the Strait of Hormuz in 2018 made up about one-third of total global seaborne traded oil. More than one-quarter of global liquefied natural gas trade also transited the Strait of Hormuz in 2018. EIA estimates that 76% of the crude oil and condensate that moved through the Strait of Hormuz went to Asian markets in 2018…the United States imported about 1.4 million b/d of crude oil and condensate from Persian Gulf countries through the Strait of Hormuz, accounting for about 18% of total U.S. crude oil and condensate imports and 7% of total U.S. petroleum liquids consumption.”