LNG import terminal at the port of Rotterdam in February 2022.
Federico Gambarini | Picture Alliance | Getty Images
Russia’s invasion of Ukraine a year ago transformed the world’s energy supply chain, making the United States the clear top energy exporter in the world.
As Europe struggled with threats to its supply of natural gas imports from Russia, US exporters and others rushed to divert cargoes of liquefied natural gas from Asia to Europe. Russian oil is under sanctions and the European Union no longer accepts sea freight from Moscow. resulting in, Shipments of US crude oil and refined products to Europe surged.
“The US used to supply military weapons, now it supplies energy weapons,” said John Kilduff, a partner at Again Capital.
This is the first time since World War II that the United States has become such an important energy exporter. According to weekly data from the Energy Information Administration, exports of crude oil and refined products hit a record high of 11.1 million barrels for the week ended February 24. According to Citigroup, this is more than the total output of either Saudi Arabia or Russia.
Exports averaged about 10 million barrels a day for the four weeks ending February 24. A year ago, it was 7.6 million barrels a day.
“To find that the United States is the largest exporter of LNG and one of the largest exporters of oil is surprising given decades of concern about energy dependence. The story is part of a larger remapping of the world’s energy,” said Daniel Yergin. , Vice Chairman of S&P Global. “What we are seeing now is the continuation of the world’s energy reuse that began with the U.S. shale revolution. In 2003, the U.S. is expected to become her largest importer of LNG. It was done.”
Yergin said the changing role of the U.S. oil and gas industry in the global energy order will be among the thousands attending the annual CERAWeek by S&P Global Energy Conference in Houston, March 6-10. I said it would be an issue. Among the conference speakers were chevron, exxon mobil, baker fuse and Freeport McMorranamong others.
“From an energy standpoint, ironically, if you look straight back at where we were the day before the invasion…if you look at the prices, you’d say not much is happening,” said chief Daniel Pickering. Told. Head of Investment at Pickering Energy Partners. “The global natural gas price has skyrocketed, but has rebounded. Oil is now lower than it was before the invasion. ing. “
The United States has been the annual net total energy exporter since 2018, according to the Department of Energy. of crude oil and petroleum products.
US energy imports in 2005 amounted to about 30% of total US consumption.
“There is a global LNG boom that has become more evident and visible in the market,” Mr Pickering said. “We have changed who consumes what types of crude oil and products. We have changed where Russian oil moves to make sense.”
India and China are currently the largest importers of Russian crude oil. “Look at these things. To me, it’s a very clear alignment of how the world thinks about supply over the next four or five years.”
But when Russia invaded Ukraine a year ago, it was not clear whether the world would have enough supplies, or whether oil prices would rise sharply. This is especially true in Europe, where supplies are plentiful.
oil
RBC commodities strategists say there are several factors that have helped Europe weather this winter.
“The combination of warmer weather, mandatory protective measures and additional supply from alternative producing countries such as the United States, Norway and Qatar has allowed us to avoid the worst-case scenario for Europe this winter,” said the strategists. “Countries such as Germany, which depended on low-cost Russian gas to meet their economic needs, are racing to build new LNG import infrastructure to prepare for a future freed from the Moscow elements. rice field.”
But they also point out that Europe is not clear, especially if military conflict continues. They warn that it could be difficult to build and next winter’s cold weather could cause considerable economic hardship,” they added.
Qatar has promised to send more gas to Europe, and the US is building more capacity. “At Gas, we are going to be a very real player. We are reliable. We have the rule of law. Ours is pretty quick compared to many potential projects in ,” said Pickering. “My guess is that we [capacity of] 12 [billion cubic feet] The daily export volume will be close to 20 and will be a big supplier to Europe. ”
U.S. exports are currently about 10 Bcf per day, Pickering said.
Companies he finds attractive in the gas sector include: EQT, Cheniere, chesapeake energy and Southwestern Energy.
Oil is another story. Pickering said the US industry has chosen not to become a global swing producer. “We are not swing producers because we have decided not to follow capital discipline,” he said.
Energy companies now have revenue visibility they didn’t have before, and that could last another five years or so, Pickering said. Oil companies have not overproduced as they have in the past, and despite requests from the White House over the past year, they have not jumped in to increase production.
of The White House also announced the energy industry’s Stock repurchase programs run by many companies.
“They generate a lot of cash, and they are rewarded by shareholders for being disciplined with that cash,” Pickering said. “I’ve seen companies show optimism, like Chevron’s $75 billion buyback.”
“Russian-Ukrainian dynamics may have ushered in a time when it was cool to bashing big oil, but you can bashing all the way down to the banks, and the political dynamics are the same as the financial and economic dynamics. are very different, I expect.
The U.S. currently produces about 12.3 million barrels of oil per day, and Pickering doesn’t expect that number to rise further. Producer discipline has supported stock prices. The S&P energy sector is his best-performing sector, up 18% over the past 12 months, and he’s only three of the 11 sectors showing gains. Industrials were the next highest, up 1.7%.
“Our absolute production levels are as high as oil and gas combined. We were a net importer, and we have reduced that dramatically. This is a big change,” Pickering said. “The shale boom benefited the energy sector. It benefited US consumers. It was a terrible stretch for producers. They did their job too well. Overproduction.” We took the most barrels from OPEC when we went from 5 million to 13 million barrels a day and that was when we had the most influence. I was a swing producer.”
