US Oil Independence

EIN News said on 6/19, "OPEC Split Threatens Increase in Saudi Oil Production A growing split between the world's biggest oil consumers and major OPEC producers over prices means Saudi Arabia may no longer increase its oil output by as much as it pledged. (telegraph.co.uk)".


The next day it also said, "OPEC Seeks Tranquil Market OPEC's top official said he wanted to mend fences with the International Energy Agency and avoid a repeat of a release of oil from stockpiles that has strained consumer-producer relations. (theaustralian.com.au)

One minute OPEC appears tough and the next minute they appear conciliatory. Why is that?

The answer lies in their recognition that they have started to lose their world monopolistic power. At one time, they could deny production and therefore supplies to the US, which could cause great pain. Some will remember the long gas lines in 1973 as OPEC cut supplies to the US.

That is now a significantly reduced possibility.

OPEC countries produce 32.9 million barrels per day. They collectively consume 7.5 million barrels. Therefore, they have 25.4 million barrels available for export.

The big change has come about in great increases in production of non-OPEC countries. Non-OPEC countries produce 46.9 million barrels per day, consume 59.6 million barrels, and have a deficit of 12.7 million barrels.

While the non-OPEC country still have a deficit of 12.7 million barrels, it is only half of what OPEC countries have available for export.

The big deficit countries are the US with 10.9, the EU with 11.3, China with 4.1 and India with 2.1 million barrels per day. Russia has a surplus of 7.8 million barrels for export.

While non-OPEC countries have considerably increased world oil supply, the US and the EU are still somewhat at the mercy of OPEC, although less so than previously. The US has large oil reserves, which are only unavailable because of government restriction. We are now producing 7.8 million barrels. If we a little more than double the production rate through significantly increased drilling and pumping, we can be out of OPEC's clutches. Russia would likely be glad to supply any temporary deficit amounts.

.